A critical evaluation of different interventions against escalation of commitment

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Escalation of commitment denotes decision makers¿ persisting in a losing course of action (Staw, 1976). In order to avoid the massive wasting of time or financial resources due to escalating commitment, several interventions were developed and found to be effective, empirically. However, in all previous studies abortion of the questionable project is the correct solution, and interventions are deemed effective whenever they lead to participants reinvesting less or aborting a project earlier. This causes two problems: first, it is impossible to differentiate between an actual reduction in the tendency to escalate commitment on one hand and a simple increase in participants’ risk aversion on the other, because in case of a failing project both lead to reduced reinvestments. This, in turn, leads to the second problem namely that whenever a project is ultimately successful - despite initial setbacks - existing interventions might produce paradoxical effects such as premature termination of a project or insufficient reinvestments. This is crucial because under certain conditions decision makers tend to overly deescalate their commitment, thereby violating normative rationality (Heath, 1995). Hence, the objective of the current research proposal is a critical evaluation of the previous and supposedly effective interventions against escalating commitment as well as proposing and evaluating two new interventions.