Escalation of Commitment

Staw's experiment and conceptualization

Staw (1976) asked business students to play a financial officer of a fictional company and allocate research and development funds to one of two divisions. After learning that the chosen division had performed poorly, students allocated further funds; those who had made the initial decision themselves put far more money into the failing division than those for whom someone else had decided. Staw explained this as a self-justification motive to show that one's earlier decision was right, linking it to cognitive dissonance theory. Staw (1981) and Staw and Ross (1987) grouped the causes of escalation into project, psychological, social and organizational determinants. Social determinants include the motive to save face and cultural admiration for consistent leaders.

Sunk costs and entrapment

Arkes and Blumer (1985) demonstrated in several experiments the sunk cost effect, in which people stick with an original choice because of costs already paid despite better alternatives. For example, people holding a more expensive ski trip ticket tended to choose that trip over another they expected to enjoy more. Whyte (1986) reinterpreted escalation through prospect theory: having already incurred losses, people are risk-seeking in the domain of losses and so gamble on further investment rather than accept a sure loss. In Shubik's (1971) dollar auction, a dollar is auctioned under a rule that the second-highest bidder also pays, and bids often climb well above a dollar. Teger (1980) and Brockner and Rubin (1985) called such situations entrapment, analyzing how the motive to recoup past investment keeps conflicts escalating.

Field cases and meta-analysis

Ross and Staw (1993) analyzed the Shoreham nuclear power plant in New York, initially estimated at $75 million, which absorbed billions of dollars before being closed without commercial operation. They showed how early optimism, political and institutional commitment and the costs of withdrawal entrenched commitment over time. Staw and Hoang (1995) reported a sunk cost effect in the NBA: controlling for performance, players drafted higher received more playing time and stayed longer with their teams. Simonson and Staw (1992) reported experimental evidence that holding decision makers accountable for process rather than outcomes, or setting loss limits in advance, reduces escalation. In a meta-analysis, Sleesman and colleagues (2012) concluded that project, psychological, social and structural determinants all influence escalation of commitment. The concept is studied in research on decision biases alongside sunk costs, the planning fallacy and status quo bias.

FAQ

What is escalation of commitment in simple terms?

It is continuing to pour money and time into a failing venture because "we have already invested so much that we cannot quit." Reluctance to admit losses and the wish to show the original decision was right both play a role.

Is escalation of commitment the same as the sunk cost effect?

They are closely related but not identical. The sunk cost effect broadly refers to sticking with a choice because of costs already incurred, while escalation of commitment refers to the process of investing ever more resources in the same course despite continuing negative feedback. Besides sunk costs, escalation involves factors such as self-justification, face-saving and organizational structure.

Sources reviewed: 2026-10-26

References

1. Staw, B. M. (1976). Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27–44.
2. Staw, B. M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 577–587.
3. Brockner, J., & Rubin, J. Z. (1985). Entrapment in Escalating Conflicts: A Social Psychological Analysis. New York: Springer-Verlag.
4. Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124–140.
5. Whyte, G. (1986). Escalating commitment to a course of action: A reinterpretation. Academy of Management Review, 11(2), 311–321.
6. Teger, A. I. (1980). Too Much Invested to Quit. New York: Pergamon Press.
7. Shubik, M. (1971). The dollar auction game: A paradox in noncooperative behavior and escalation. Journal of Conflict Resolution, 15(1), 109–111.
8. Staw, B. M., & Ross, J. (1987). Behavior in escalation situations: Antecedents, prototypes, and solutions. Research in Organizational Behavior, 9, 39–78.
9. Simonson, I., & Staw, B. M. (1992). Deescalation strategies: A comparison of techniques for reducing commitment to losing courses of action. Journal of Applied Psychology, 77(4), 419–426.
10. Ross, J., & Staw, B. M. (1993). Organizational escalation and exit: Lessons from the Shoreham nuclear power plant. Academy of Management Journal, 36(4), 701–732.
11. Staw, B. M., & Hoang, H. (1995). Sunk costs in the NBA: Why draft order affects playing time and survival in professional basketball. Administrative Science Quarterly, 40(3), 474–494.
12. Sleesman, D. J., Conlon, D. E., McNamara, G., & Miles, J. E. (2012). Cleaning up the big muddy: A meta-analytic review of the determinants of escalation of commitment. Academy of Management Journal, 55(3), 541–562.