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Escalation and Entrapment Theories Revisited
Published in Helga Drummond, Julia Hodgson, Escalation in Decision-Making, 2016
The present study has focused upon economic behaviour and decision-making. More specifically, when a venture seems to be failing, decision-makers may be torn between cutting their losses and ‘throwing good money after bad’. The main purpose of the present study was to explore how decision-makers respond to that dilemma. In particular, the concern was to understand why some decision-makers exit sooner rather than later, whereas others persist to the bitter end, only to compound their difficulties – a phenomenon known as escalation of commitment.
Errors from the Top
Published in Jean-Christophe Le Coze, Post Normal Accident, 2020
Escalation of commitment is highly relevant here and defined as situations “where losses have been suffered, where there is an opportunity to persist or withdraw, and where the consequences of these actions are uncertain” (Staw, 1997, 192). This definition fits quite well with the view of Finkelstein, who argues through his analysis of numerous strategic failures that “the real causes of nearly every major business breakdown are the things that put a company on the wrong course and keep it there” (Finkelstein, 2003, 138).
The Moderating Effects of Product Involvement on Escalation Behavior
Published in Journal of Computer Information Systems, 2019
When bidders experience auction fever, their adrenaline starts to rush, their emotions may block their abilities to think wisely, and they can end up bidding much more than they initially expected. The willingness to continue bidding in such a situation represents a form of escalation behavior [1, 41]. In this study, we build on existing knowledge of escalation behavior in online auction settings to explore the role that product involvement plays in this context. We focus on product involvement because it is known by marketing researchers to be an important factor that can influence individuals’ purchasing decisions. In the next section, we first review recent research on individuals’ bidding behavior in online auctions, and then, we draw attention to explaining the major drivers of individuals’ escalation behavior in online auctions. Lastly, we examine the moderating effect of product involvement on the relationships between key escalation drivers (e.g., sunk cost and completion) and escalation behavior (i.e., willingness to continue bidding) in the online auction context.1Escalation of commitment has been defined as continued commitment in the face of negative information about prior resource allocations coupled with “uncertainty surrounding the likelihood of goal attainment” [11, p. 40].
Effects of user cognitive biases on platform competition
Published in Journal of Decision Systems, 2019
Evangelos Katsamakas, Heba Madany
Individuals that suffer from an escalation of commitment tend to escalate their commitment to their initial decision or course of action (Bazerman & Moore, 2017, p. 119). Individuals continue to allocate their resources in an attempt to justify a previous commitment (Brockner, 1992; Staw, 1981). In particular, individuals make subsequent decisions that continue a commitment beyond the level suggested by rationality (Devigne, Manigart, & Wright, 2016; Mayberry, Boles, & Donthu, 2018). The information systems literature has scrutinised the escalation of commitment bias in the context of IT investments (Keil et al., 2000; Mallampalli & Karahanna, 2017). In the model, Users who fall under this category commit themselves to one platform throughout the simulation, even when switching may provide higher user utility according to user utility function (1). Hence, those users never switch platforms.
Forecasting the Investors’ Escalation of Commitment in PPP Project at Different Project Stages: A Regression Model Based on the Influence of Social Factors
Published in Engineering Management Journal, 2023
Escalation of commitment (EOC) refers to the behavior that decision-makers continue to invest resources in a project in the face of the negative consequences of resource investment in the early stage of the project (Staw, 1976). There are three main characteristics of EOC: initial investment, including the capital, time, labor, etc.; negative feedback of previous decision-making behavior; two-way decision-making: continue to invest resources or choose to stop investment and terminate the project. Therefore, project sunk cost, information clarity, and completion can affect the process of commitment (He & Mittal, 2007; Rutten et al., 2014).