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http://ssrn.com/abstract=1484917
 
 

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Vicarious Entrapment: Your Sunk Costs, My Escalation of Commitment


Brian Gunia


Northwestern University - Kellogg School of Management

Adam D. Galinsky


Northwestern University - Kellogg School of Management

Niro Sivanathan


Northwestern University - Kellogg School of Management

June 15, 2009

22nd Annual IACM Conference Paper

Abstract:     
Individuals often honor their own sunk costs, increasing their commitment to failing courses of action, from financial investments to wars. Because honoring sunk costs is driven by self justification processes, a widely offered prescription for preventing escalation of commitment is to have a different, second individual make subsequent resource decisions. In contrast to this proposed remedy, three experiments explored whether creating a psychological connection between the first and second decision-maker leads the second decision-maker to invest further in the failing program orchestrated by the initial decision-maker. Across three studies, employing different escalation scenarios, we found that multiple forms of psychological-connectedness - perspective-taking and interdependence - led decision-makers to vicariously justify others’ initial decisions, escalating their commitment to the earlier investments. Overall, psychological connections between decision-makers undermined the most accepted prescription for deescalation. These results have important implications for organizations and public policy and for theories of escalation.

Number of Pages in PDF File: 18

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Date posted: October 7, 2009 ; Last revised: November 4, 2009

Suggested Citation

Gunia, Brian and Galinsky, Adam D. and Sivanathan, Niro, Vicarious Entrapment: Your Sunk Costs, My Escalation of Commitment (June 15, 2009). 22nd Annual IACM Conference Paper. Available at SSRN: http://ssrn.com/abstract=1484917 or http://dx.doi.org/10.2139/ssrn.1484917

Contact Information

Brian Gunia (Contact Author)
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
Adam D. Galinsky
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
Niro Sivanathan
Northwestern University - Kellogg School of Management ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
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