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Abstract

Research indicates inappropriate escalation of commitment to apparently failing decisions occurs in many areas of life. Examples include doubling-up blackjack bets to recover losses, the too lengthy Vietnam War debacle, and the tendency to continue with financial investments long after they appear to be failing. What motivates such behavior? Two theories presently compete as major explanations for this behavior: the self-justification the01y and the prospect theory. This paper compares the two theories to determine which the01y better predicts escalation behaviors within au un-confounded and unambiguous context. The research is motivated by the belief that understanding why people escalate is prerequisite to successfully developing strategies for mitigating the damages of escalation. Results show, that after removing the confounding effects of framing differences across conditions, prospect theory better predicts escalation than does self-justification theory within the context tested.

Volume

2

Issue

1

First Page

37

Last Page

45

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