When Marriott acquired Starwood hotels they beat out Hyatt, which may have offered a more financially attractive package but whose complicated stock structure (the Pritzker family has outsized voting rights) created complications, and Chinese conglomerate Anbang Insurance.

Arne Sorenson, CEO of Marriott, says he was surprised that they won the bidding and were able to make the deal.

Initially we thought it was too expensive. It got cheaper for us over the course of the year. In early ’16 Chinese surface…that’s when Anbag comes in… it costs us a little bit more, but we still to my surprise came out on top.

Sorenson also reports that Bill Marriott “held himself back for three or four days” — and “was worried that without grounding [Marriott] would say ‘why on earth would you take this risk’?” In fact his Chairman’s first reaction was “you know Arne you don’t have to do this” because of the work it would entail.

It was the Starwood database Marriott was running that was breached in one of the biggest corporate data hacks in history. And it was the Starwood acquisition that led to the creation of Marriott Bonvoy, whose accompany IT issues have certainly proven challenging for many customers.

It’s proven a huge challenge, and the jury is still out on the deal. But Sorenson may have been insufficiently acquainted with the Winner’s Curse.

Where there are multiple bidders valuing a common item, in this case a company, the winner tends to be the one that overpays. Generally speaking each bidder has the same information about what they’re buying, so the one willing to outbid the others is likely paying too much.