Mitigating Escalation of Commitment: An Investigation of the Effects of Priming in Team Decision-Making Settings

Abstract:     
This research examines escalation of commitment in team capital investment decisions and the extent to which it can be mitigated using a cognitive prime. Specifically, I examine the use of a cognitive prime as a way to mitigate escalation in two decision-making settings: (1) face-to-face team and (2) computer-mediated team. Continued investment in failing projects is costly for firms. The use of a cognitive prime to reduce escalation would provide a low cost way to mitigate escalation. In this study, participants are primed to think about sunk costs. The expectation is that priming team members to think about sunk costs will increase the accessibility of sunk cost knowledge and reduce the likelihood of continued investment in the failing project. Further, based on Persuasive Arguments Theory, it is expected that the prime will reduce escalation in teams communicating in a computer-mediated setting more than in any other decision setting. The results of the experiment support the prediction that priming will reduce escalation and did so in all decision making settings. Further, the results indicate that, in the computer-mediated setting, primed teams had the least amount of escalation behavior coupled with the largest difference in escalation compared to teams that were not primed.

Number of Pages in PDF File: 65

Keywords: experimental, construct accessibility, sunk cost, persuasive arguments theory, computer-mediated communication

working papers series