IL45: Where Markets Reveal Human Error ft. Alex Imas
Top Traders Unplugged
Practical consequences of the winner's curse
They discuss how competition amplifies overbidding and strategies like publicizing the curse to reduce losses.
Today we discuss one of the most popular and influential economic books of the last few decades - The Winner’s Curse. Originally published in 1994, a new version has just been released and we are joined by co-author Alex Imas who wrote the new edition alongside Nobel Prize winner Richard Thaler. When are we likely to spend a windfall and when are we likely to save it? When is it most dangerous to bid for business against competitors? And are ‘arbitrage’ opportunities in markets really a free lunch?
-----
50 YEARS OF TREND FOLLOWING BOOK AND BEHIND-THE-SCENES VIDEO FOR ACCREDITED INVESTORS - CLICK HERE
-----
Follow Niels on Twitter, LinkedIn, YouTube or via the TTU website.
IT’s TRUE ? – most CIO’s read 50+ books each year – get your FREE copy of the Ultimate Guide to the Best Investment Books ever written here.
And you can get a free copy of my latest book “Ten Reasons to Add Trend Following to Your Portfolio” here.
Learn more about the Trend Barometer here.
Send your questions to info@toptradersunplugged.com
And please share this episode with a like-minded friend and leave an honest Rating & Review on iTunes or Spotify so more people can discover the podcast.
Follow Kevin on SubStack & read his Book.
Follow Alex on X.
Episode TimeStamps:
00:00 - Opening remarks and framing the law of one price
01:42 - Introducing the Ideas Lab series and Alex Imas
03:44 - From pre med to behavioral economics
08:15 - Mental accounting and how people really treat money
10:45 - Housing wealth, illiquidity, and self control
15:39 - Savings behavior, capital gains, and inequality
17:11 - Attention, salience, and why nudges work or fail
22:07 - Nudges versus incentives and policy confusion
25:18 - The winner’s curse and common value auctions
30:01 - Auctions, IPOs, and competitive overbidding
33:44 - The law of one price and market mispricing
36:50 - Limits to arbitrage and hidden risks
39:32 - Why mispricing persists even without confusion
43:26 - Why behavioral economics stays outside textbooks
46:53 - What makes decisions difficult and why it matters
Copyright © 2025 – CMC AG – All Rights Reserved
----
PLUS: Whenever you're ready... here are 3 ways I can help you in your investment Journey:
1. eBooks that cover key topics that you need to know about
In my eBooks, I put together some key discoveries and things I have learnt during the more than 3 decades I have worked in the Trend Following industry, which I hope you will find useful. Click Here
2. Daily Trend Barometer and Market Score
One of the things I’m really proud of, is the fact that I have managed to published the Trend Barometer and Market Score each day for more than a decade...as these tools are really good at describing the environment for trend following managers as well as giving insights into the general positioning of a trend following strategy! Click Here
3. Other Resources that can help you
And if you are hungry for more useful resources from the trend following world...check out some precious resources that I have found over the years to be really valuable. Click Here
The AI-powered Podcast Player
