Title

The Effect Of Decision Risk And Project Stage On Escalation Of Commitment

Keywords

Decision risk; Escalation of commitment; Project completion; Project information; Project stage; Risk taking; Sunk cost

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. © 2007 Elsevier Inc. All rights reserved.

Publication Date

7-1-2007

Publication Title

Organizational Behavior and Human Decision Processes

Volume

103

Issue

2

Number of Pages

225-237

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1016/j.obhdp.2007.01.002

Socpus ID

34249091718 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/34249091718

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