Escalation of commitment

Escalation of commitment refers to a pattern of behavior in which an individual or group will continue to rationalize their decisions, actions, and investments when faced with increasingly negative outcomes rather than alter their course. The related term sunk cost fallacy has been used by economists and behavioral scientists to describe the phenomenon where people justify increased investment of money, time, lives, etc. in a decision, based on the cumulative prior investment (“sunk costs”), despite new evidence suggesting that the cost, beginning immediately, of continuing the decision outweighs the expected benefit. These decisions are irrational in their current context but in alignment with decisions and actions previously made, and they can be influenced by a variety of determinants and contexts. The dilemmas leading up to such decisions usually involve the prior choices no longer working or causing personal or group losses. While there are options to either cease current actions or continue on with them, neither has clear outcomes or is the obvious choice. Escalation of commitment then occurs when persistence is chosen over withdrawal.

The term describes poor decision-making in business, politics, and gambling and is frequently used in psychology and sociology.

It is also referred to as “irrational escalation”, “irrational escalation of commitment” or “commitment bias”.

In game theory is a non rational behavior that can challenge rational models. The usual models are:

• Temporal model of escalation: groups engage in temporal comparisons, which means that you compare actions and behaviors at “different points in time.” This is a form of social identity scenario. This type of comparison can be made when a decision seems unproductive and forces team members to consider any threat to the group.
• Aggregate model: “The aggregate model’s emphasis is upon the accumulation and balance of forces rather than the ordering of effects over time.” The model is general and can provide an ideal view as to how. The effects whether positive or negative are defined by micro and macro forces. This model goes by situation rather than what researchers have defined as the norm. There is no process to follow, which makes it very useful for researchers because they can understand a situation more clearly as well as see the bigger picture of the situation.

See also

Game Theory, Decision theory, Loss aversion

Papers

• Brockner, Joel (1992). The escalation of commitment to a failing course of action: toward theoretical progress. Academy of Management Review 17 (1): 39-61.
• Huning, Tobias M; Thomson, Neal F (2014). The Impact of Performance Attributions on Escalation of Commitment. Journal of Organizational Culture, Communication, and Conflict 18 (1).
• Dietz-Uhler, Beth (1996). “The escalation of commitment in political decision-making groups: a social identity approach”. European Journal of Social Psychology 26 (4): 611-629.
• azerman, Max H.; Neale, Margaret A. (1992). Nonrational Escalation of Commitment in Negotiation. European Management Journal 10 (2): 163–168. Adapted from a chapter in: Bazerman, Max H.; Neale, Margaret A. (1992). Negotiating Rationally. New York: Free Press.
• Bazerman, Max H.; Giuliano, Toni; Appelman, Alan (1984). Escalation of commitment in individual and group decision making. Organizational Behavior and Human Performance 33 (2): 141-152