The effect of decision risk and project stage on escalation of commitment

    Authors

    X. He;V. Mittal

    Comments

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    Abbreviated Journal Title

    Organ. Behav. Hum. Decis. Process.

    Keywords

    escalation of commitment; decision risk; project stage; project; information; project completion; risk taking; sunk cost; SUNK COSTS; SELF-EFFICACY; ORGANIZATIONAL-BEHAVIOR; PROSPECT-THEORY; COMPLETION; CONSEQUENCES; DETERMINANTS; RECOGNITION; INFORMATION; SITUATIONS; Psychology, Applied; Management; Psychology, Social

    Abstract

    We investigate the joint effects of decision risk and the stage of project completion on escalation of commitment. In two experiments, we demonstrate that the effect of decision risk is moderated by project stage such that the decision risk has the strongest effect on escalation of commitment at the intermediate stage of project completion. This is due to the dynamic influences underlying escalation of commitment. Whereas the need for project information influences resource commitment at the initial stage of a project, the need for project completion affects resource allocation at the terminal stage. In contrast, motivation to commit resources is disproportionately low at the intermediate stage since both the need for project information and the need for project completion are relatively weak. As such, the decision to commit resources is most sensitive to the moderating effect of decision risk when the project is about half complete. (c) 2007 Elsevier Inc. All rights reserved.

    Journal Title

    Organizational Behavior and Human Decision Processes

    Volume

    103

    Issue/Number

    2

    Publication Date

    1-1-2007

    Document Type

    Article

    Language

    English

    First Page

    225

    Last Page

    237

    WOS Identifier

    WOS:000247795400005

    ISSN

    0749-5978

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