Jake Green estimates the cost of future projects for a large contracting firm. Jake uses precisely the same
techniques to estimate the costs of every potential job and formulates bids by adding a standard profit markup. For some companies, to which the firm offers its services, there are no competitors also seeking their business, so Jake’s company is almost certain to get these companies as clients. For these jobs, Jake finds that his cost estimates are right, on average. For jobs where competitors are also vying for the business, Jake finds that they almost always end up costing more than he estimates.
True or False: To avoid the winner’s curse, Jake should assume that everyone else thinks the costs are greater than his original estimate, and adjust his bid accordingly.