Escalation of Commitment

What is Escalation of Commitment?

Escalation of commitment means continuing or increasing an investment after unfavorable feedback. The problem is not persistence itself. It is letting your involvement in a past decision drive what you do next, even when the prospects no longer justify it.

How it works

In Staw's experiment with business students, participants allocated resources in a simulated business decision. Those who were personally responsible for an earlier negative outcome committed more resources. The finding supports self-justification as one explanation: abandoning the investment can mean admitting that your earlier decision was wrong.

Persistence or escalation?

A difficult project can still be worth continuing. Trying another approach can be sensible. The question is whether the next investment makes sense given what you now know.

Imagine a project that has missed several milestones. “We have already spent six months on it” describes the past. “The next month will let us test a promising solution at an acceptable cost” is a claim about the future. Those are different reasons for continuing.

Why it matters

Past effort can make a bad project hard to leave. When reviewing the decision, separate what you cannot recover from the costs, benefits and alternatives still ahead of you. That gives the next investment a chance to stand on its own merits.