Escalation of commitment

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Escalation of commitment refers to a pattern of behavior in which an individual or group will continue to rationalize their decisions and actions when faced with increasingly negative outcomes rather than alter their course. Their decisions are irrational in their current context but are in alignment with decisions and actions previously made. A variety of determinants and contexts can influence this internal or external choice. 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 and is the obvious choice. [1] 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. In the latter, it is also referred to as “irrational escalation", "irrational escalation of commitment" or "commitment bias". Examples are frequently seen when parties engage in a bidding war; the bidders can end up paying much more than the object is worth to justify the initial expenses associated with bidding (such as research), as well as part of a competitive instinct.

The term has been used to describe the United States commitment to military conflicts including Vietnam in the 1960s - 1970s and in Iraq in the 2000s, where sunk costs in terms of dollars spent and lives lost were taken as justifying continued involvement.[5] The related term sunk cost fallacy has been used by financiers 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, despite new evidence suggesting that the cost, starting today, of continuing the decision outweighs the expected benefit. The phenomenon and the sentiment underlying it are reflected in such proverbial images as "Throwing good money after bad" or "In for a dime, in for a dollar".

Early Use[edit]

Escalation of commitment was first described by Barry M. Staw in his 1976 paper, "Knee deep in the big muddy: A study of escalating commitment to a chosen course of action".[2]


The main drivers of the tendency to continue investing in losing propositions are project, psychological, social, and structural.[3]


Project determinants are those that refer to the original commitments and decisions made at a project’s beginning such as financial costs. Among them, decision risk, opportunity cost information, and information acquisition have been found to have negative relationships with escalation of commitment, while decision uncertainty, positive performance trend information, and expressed preference for initial decision have been found to have positive relationships. [3] High costs of ending a project or changing its course, potential financial gain upon completion, and extensive structure can factor into to escalation of commitment, making it difficult to walk away from the project. Preventing future monetary loss, potential savings, and clearly available alternatives can allow for avoidance of the behavior. In studies by Teger and later Ross and Staw, situations in which ending an action costs more than completing it resulted in decision makers being trapped in the current, still costly behaviors. [1]


Psychological determinants are those that refer to internal views on the actions and information involved in a project. Of those, sunk costs, time investment, decision maker experience and expertise, self-efficacy and confidence, personal responsibility for the initial decision, ego threat, and proximity to project completion have been found to have positive relationships with escalation of commitment, while anticipated regret and positive information framing have been found to have negative relationships. [3] Optimism and belief that one has control over what will still be positive outcomes lead to continued self-justification of commitment to actions. Initial personal investments are then added to in the hope that their currently negative results will be overcome. This was illustrated in a case study by Staw, where providing business students with manipulated responsibilities for initial decisions and their outcomes resulted in the greatest commitment to increased actions and resources when the initial decision assigned was made directly by the student with poor outcomes. [1] Further risk will be taken in order to attempt avoidance of further problems.


Social determinants are those that refer to the expectations and influence of other individuals or groups on project actions. Included in these, group identity or cohesive strength has been found to have the most influence on escalation of commitment while public evaluation of decision and resistance to decision from others has little significance in relation.[3]


Structural determinants are those that refer to the cultural and environmental features and resources of the project’s overall organization. The minimal research available on them indicates that agency problems most influence escalation of commitment.[3]


  • The dollar auction is a thought exercise demonstrating the concept.
  • After a heated and aggressive bidding war, Robert Campeau ended up buying Bloomingdale's for an estimated $600 million more than it was worth. The Wall Street Journal noted that "we're not dealing in price anymore but egos." Campeau was forced to declare bankruptcy soon afterwards.[4]
  • Certain fraud schemes exploit this behaviour, such as the Nigerian 419 Scam, where victims continue to spend money for alleged business deals, although the fraudulent character of the deal appears obvious to uninvolved persons.[5]

See also[edit]


  1. ^ a b c Staw, Barry M. (1997). Shapira, Zur, ed. Organizational Decision Making. New York, NY: Cambridge University Press. pp. 191–215. 
  2. ^ Barry M. Staw: "Knee-deep in the Big Muddy: A Study of Escalating Commitment to a Chosen Course of Action". Organizational Behavior and Human Performance 16(1):27-44.
  3. ^ a b c d e Sleesman, Dustin J.; Conlon, Donald E.; McNamara, Gerry; Miles, Jonathan E. (June 2012). "Cleaning Up the Big Muddy: A Meta-Analytic Review of the Determinants of Escalation of Commitment". Academy of Management Journal 55 (3): 541–562. 
  4. ^ Max H. Bazerman: Negotiating Rationally January 1, 1994 (ISBN 0-02-901986-9).
  5. ^ Hoax Slayer, Advance Fee Scams - Nigerian Scams - 419 Scam Information, retrieved 5-1-2015