Escalation of commitment

Escalation of commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continues the behavior instead of altering course. The actor maintains behaviors that are irrational, but align with previous decisions and actions. Economists and behavioral scientists use a related term, sunk-cost fallacy, to describe the justification of increased investment of money, time, lives, etc. in a decision, based on the cumulative prior investment ('sunk cost') despite new evidence suggesting that the cost, beginning immediately, of continuing the decision outweighs the expected benefit. In sociology, irrational escalation of commitment or commitment bias describe similar behaviours. The phenomenon and the sentiment underlying them are reflected in such proverbial images as 'throwing good money after bad' or 'in for a penny, in for a pound', or 'It's never the wrong time to make the right decision.' 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'. Researchers, inspired by the work of Staw, conducted studies that tested factors, situations and causes of escalation of commitment. The research introduced other analyses of situations and how people approach problems and make decisions. Some of the earliest work stemmed from events in which this phenomenon had an effect and help explain the phenomenon. Over the past few decades, researchers have followed and analyzed many examples of the escalation of commitment to a situation. The heightened situations are explained in three elements. Firstly, a situation has a costly amount of resources such as time, money and people invested in the project. Next, past behavior leads up to an apex in time where the project has not met expectations or could be in a cautious state of decline. Lastly, these problems all force a decision-maker to make choices that include the options of continuing to pursue a project until completion by adding additional costs, or canceling the project altogether. Researchers have also developed an argument regarding how escalation of commitment is observed in two different categories. Many researchers believe that the need to escalate resources is linked to expectancy theory. 'According to such a viewpoint, decision makers assess the probability that additional resource allocations will lead to goal attainment, as well as the value of goal attainment (i.e., rewards minus costs), and thereby generate a subjective expected utility associated with the decision to allocate additional resources.' The next phase of the escalation process is self-justification and rationalizing if the decision the leader made used resources well, if the resources being used were used to make positive change, and assuring themselves that the decision they chose was right. Leaders must balance costs and benefits of any problem to produce a final decision. What matters most often in assuring the leader that they made the right choice regardless of the final outcome is if their decision is what others believed in. Research conducted on the topic has been taken from many other forms and theories of psychology. Many believe that what researchers have done thus far to explain this behavior is best analyzed and tested through situational development and resource allocation.