Escalation Bias: Does it Extend to Marketing?

Journal of the Academy of Marketing Science, Vol. 21, No. 3, pp. 247-253, 1993

11 Pages Posted: 11 Feb 2005 Last revised: 31 Dec 2011

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Nicole Coviello

University of Auckland - Business School

Barbara Safranek

S.G. Warburg & Co., Inc.

Abstract

Escalation bias implies that managers favor reinvestments in projects that are doing poorly over those doing well. We tested this implication in a marketing context by conducting experiments on advertising and product-design decisions. Each situation was varied to reflect either a long-term or a short-term decision. Besides these four conditions, we conducted three replications. We found little evidence of escalation bias by 365 subjects in the seven experimental comparisons.

Keywords: Escalation bias, marketing, management, decisiong making

Suggested Citation

Armstrong, J. Scott and Coviello, Nicole and Safranek, Barbara, Escalation Bias: Does it Extend to Marketing?. Journal of the Academy of Marketing Science, Vol. 21, No. 3, pp. 247-253, 1993. Available at SSRN: https://ssrn.com/abstract=665403

J. Scott Armstrong (Contact Author)

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
215-898-2534 (Fax)

HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

Nicole Coviello

University of Auckland - Business School ( email )

Private Bag 92019, Commerce B Building
5, Symonds Street
Auckland
New Zealand
+64 9 373 7599 Ext: 87213 (Phone)

HOME PAGE: http://staff.business.auckland.ac.nz/ncoviello

Barbara Safranek

S.G. Warburg & Co., Inc.

787 Seventh Avenue
New York, NY 10019
United States

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