Abstract
Executive Overview The article focuses on the decision making process and on human rationality. It comments on the escalation of commitment into situations that are likely to fail, and suggests that sunk costs affect continued commitment to a course of action. It states that conventional economic rationality suggests future decisions should not be based on sunk costs but that economic rationality may not always accurately describe business decision making. It examines the National Basketball Association (NBA) to examine if sunk costs affect decisions in real organizations, utilizing the NBA draft as a measure for initial costs of professional basketball players, and the extent to which teams utilize draft picks.
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