TH-P02-035 - The Impact of Escalation Decisions on Investments, Anger, and Confidence Over Time

Track:
Decision-making
What:
Poster Presentation
When:
3 hours 30 minutes
Where:
O'Brien Foyer
Discussion:
0
 
Leadership and management
Decision-making
TH-P02-035
The Impact of Escalation Decisions on Investments, Anger, and Confidence Over Time
 
A. T. Jackson 1,*, S. S. Culbertson 2, E. E. Kausel 3, M. E. Young 4
1Middle Tennessee State University, Murfreesboro, 2University of Portland, Portland, United States, 3Pontifical Catholic University of Chile, Santiago, Chile, 4Kansas State University, Manhattan, United States
 
Content:  
Purpose
Escalation of commitment refers to the tendency to invest additional resources into an ongoing effort when doing so is irrational (Sleesman, Conlon, McNamara, & Miles, 2012; B. M. Staw, 1976).  Such escalation of commitment can be costly for organizations.  This study aimed to (1) examine how escalation of commitment over time, (2) the psychological consequences of escalating, and (3) the reciprocal relationship between escalating and the psychological outcomes of escalating.
Design/Methodology
Participants made a series of investment decisions, based on the “blank radar plane” case originally presented by Arkes and Blumer (1985). After receiving negative information about an investment, participants decided whether to continue or abandon the project and the amount of additional funding to authorize. After each decision, participants rated their confidence in their decision and their anger.
Results
A series of repeated measure logistic regressions revealed that (1) people do escalate over time, but the proportion of funds they invest decreases over time, (2) escalation positively predicts anger, and (3) the relationship between escalation and confidence is reciprocal.
Limitations
The study relied on a sample of 110 college students.
Research/Practical Implications
Many individuals in this study (68%) never abandoned the project.  Decision makers should be permitted to abandon failing endeavors, without the possibility of negative consequences.
Originality/Value
Only a handful of studies have examined escalation over time. We extended the findings by conducting the first study to our knowledge examining the psychological consequences of escalation of commitment and the reciprocal relationship between anger/confidence and escalation of commitment. 
 
 
 
 
 

 
 

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