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Escalation of Commitment

Escalation situations are contexts where individuals have invested resources (usually money, but also time or energy) in pursuit of a particular goal, but after making scant progress toward the goal, they must decide to withdraw or commit additional resources. Faced with this dilemma, individuals often invest further in the failing course of action. Escalation of commitment is considered a decision-making bias and is often seen as an economically irrational act. This is because the initial invested resources are sunk costs (costs that have been incurred and cannot be recovered), which should be ignored in subsequent resource allocation decisions. Escalation of commitment has also been termed the sunk cost effect, entrapment behavior, and the “too much invested to quit” problem. This entry examines various expressions of ...

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