This document discusses the concept of escalation of commitment. It defines escalation of commitment as continuing to support past decisions even when negative outcomes occur. The document then discusses research on escalation of commitment and identifies several causes: sunk cost fallacy, confirmation bias, loss aversion, impression management, and self-justification. Finally, it provides solutions for overcoming escalation of commitment such as being aware of biases, facing consequences of decisions, and avoiding proximity to completion bias.

1. Presented by:
Fatima Ahmed (30592)
Rabia Aziz (30518)
Areeba Batool (29664)
Escalation Of
Commitment

2. Introduction
Definition, Research study
Causes of Escalation
of commitment
02.
Sunk cost fallacy,
confirmation bias, loss
aversion, impression
management and self-
justification
How to Overcome
03.
Solutions to escape
escalation of
commitment
01.
Table of contents
04. Conclusion

3. Introduction
Definition:
The concept of escalation of commitment refers to the
tendency of people to remain committed to their past
behaviors, especially those exhibited publicly, even when they
did not result in desirable outcomes.
This bias describes people's tendency to support their past
ideas, despite the evidence that they are wrong. It occurs when
people behave irrationally and continue chasing something
that will result in negative outcomes

4. Research Study
• First described by Barry M. Staw in his 1976 paper,
“Knee deep in the big muddy”
• The research examined process of escalating
commitment through the simulation of a business
investment decision.
• He showed how, when our decisions lead to
negative consequences, it would make sense to
try something else instead; however, these
undesirable outcomes often result in us becoming
more resolved in our original choice.

5. Sunk Cost
Causes people to continue
investing in a project hoping
that it will eventually turn
around when it is no longer
anticipated to do so. The
more resources that have
been spent on an investment,
the more likely a decision
maker is to escalate
commitment.
Confirmation bias
After committing to a choice,
people are far more likely to
notice and overweight evidence
that supports their decision and
ignore and underweight
evidence that does not.
Confirmation bias can therefore
cause decision makers to
escalate commitment to bad
investments.
Causes of Escalation of commitment

6. Proximity to
completion
The closer a project is to
completion, the more likely
decision makers are to
exhibit escalation of
commitment. As the end of a
project nears, completion-
oriented goals begin to
supersede the original goals
of the project
Loss aversion
A person who has a loss
aversion is more likely to
avoid losses than to achieve
equivalent gains, and that fear
can cause them the escalation
of commitment. It is thought
that the pain of losing is
psychologically about twice
as powerful as the pleasure of
gaining.

7. Based on a decision maker’s need to
justify the choices that they have made
in the past. It is an attempt to control
perception of others. A decision maker
may escalate commitment to their
original investment in order to avoid
admitting to others that their decision
has been flawed, as the outcome of an
investment is rarely free from external
scrutiny
Impression Management

8. Loss aversion
Aware of
confirmation bias
Escape sunk cost
fallacy
It is important to
remember that sunk costs
are irrelevant to decision-
making. The only factors
that should be considered
when making a decision
are the opportunity costs
and the expected future
benefits.
You can avoid loss aversion
by not getting too
emotionally involved in your
investments. There are risks
involved in investments,
many of these risks are
beyond your control and you
cannot be right all the time.
Sometimes, it is better to
move on to alternative
investment options.
Make a conscious effort to
seek out contradictory
information, decision
maker can make more
informed decisions that
are not influenced by his
own biases
Ways to Overcome

9. Maintaining
impression
Face the
consequences
Avoid proximity to
completion bias
To avoid bias due to
proximity to completion
decision maker should
constantly remind him
about the original purpose
of decision.
Remember even though
people worry about what
others will think if they
make decisions that result in
negative outcomes, the fact
of the matter is that those
who are open enough to
admit when they make a
mistake are more likely to
be respected than those
who are unwilling to do so.
To avoid escalation of
commitment due to self-
justification, Decision
maker should take
responsibility for poor
decision and don’t hesitate
to change the decision if it
is not helping in reaching
the goal.
Ways to Overcome

10. Conclusion
Escalation of commitment can be dangerous, because it can
lead people to continue down a path even when it's clear that
it's not working. If decision maker find himself in a situation
considering escalating his commitment, he should make sure
to take a step back and assess the situation objectively.
Whatever the cause, escalation of commitment can often lead
to disastrous results. Thus, it is important to be aware of the
potential and overcome it.

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