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Vicarious Entrapment: Your Sunk Costs, My Escalation of Commitment

18 Pages Posted: 7 Oct 2009 Last revised: 4 Nov 2009

Date Written: June 15, 2009

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.

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: https://ssrn.com/abstract=1484917 or http://dx.doi.org/10.2139/ssrn.1484917

Brian Gunia (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Adam D. Galinsky

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

Niro Sivanathan

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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