Abstract
First demonstrated by Staw (1976), escalation of commitment is the tendency for an individual to increase their commitment to a failing course of action when they are personally responsible for the negative consequences. An attempt was made to replicate this finding and test whether individual differences in numeracy and cognitive reflection could help explain such an effect. No evidence for escalation of commitment amongst the participants was found (N = 365). Participants simply invested more in more promising projects. Also, no evidence was found that numeracy or cognitive reflection predict escalation behaviour. The validity of escalation of commitment behaviour is discussed which suggests that future work should look to explore the boundary conditions of such an effect.
Highlights
Imagine you are the Chief Financial Officer of a large, international company
Upon looking at the financial returns provided from both programmes since you made the initial investment you discover that the programme you chose performed poorly and the programme you did not choose performed well
The present work aimed to replicate the seminal finding of escalation of commitment as first reported by Staw (1976) and further extend this work by examining potential cognitive mechanisms underlying the effect
Summary
Imagine you are the Chief Financial Officer of a large, international company. A few years ago the company was in a precarious financial situation and its board of directors voted that only one of two major product development programmes would receive an additional $10M in funding. Due to the nature of your position, you decided which of the two programmes received the increased investment. An additional $20M is made available to be further invested in the two programmes. This time you can freely allocate the funds as you wish. Imagine that you had only recently taken over as Chief Financial Officer and were not responsible for the initial investment decision.
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