Deescalation strategies: A comparison of techniques for reducing commitment to losing courses of action.

Abstract

Previous research suggests that decision makers have a tendency to become locked into courses of action—to throw good money after bad in dealing with losing projects. The present study directly compared the effectiveness of several deescalation strategies designed to make decision makers more responsive to the available evidence. Three deescalation procedures were found to be most effective: (a) making negative outcomes less threatening; (b) setting minimum target levels that, if not achieved, would lead to a change in policy; and (c) evaluating decision makers on the basis of their decision process rather than outcome. The theoretical and practical implications of each of these strategies are discussed. A long stream of empirical research has investigated the commitment of decision makers to losing courses of action. Under the rubrics of sunk cost effects (Arkes & Blumer, 1985; Garland & Newport, in press), entrapment (Brockner & Rubin, 1985), too much invested to quit (Tegar, 1980), and the escalation of commitment (Staw, 1976,1981), numerous studies have shown how individuals can become locked into failing courses of action. To date, this literature has isolated a wide variety of determinants of behavior in escalation situations, ranging from psychological to social, organizational, and project concerns not typically dealt with in the economics of investment (Staw & Ross, 1987). Much of the research in this area has focused on the determinants of escalation, and little attention has yet been given to procedures that might help people avoid the escalation trap. This is unfortunate because, just as debiasing research has helped behavioral decision theory provide policy recommendations (e.g., Fischhoff, 1982), deescalation research could potentially aid managers in avoiding the overcommitment of resources. So far, however, only the rudiments of a deescalation literature are in place. In such a stream of research, one might place Tegar's (1980) and Brockner, Shaw, and Rubin's (1979) studies showing that limit-setting can reduce escalation. Also in this group would be Nathanson et al.'s (1982) experiment showing that information about the problem of entrapment can deter individuals from initially engaging in an escalation situation. McCain's (1986) experiment showing the reduction of investment when losses are repeated and clear-cut, as well as Staw and Ross's (1987) more general discussion of possible techniques for reducing escalation are also relevant. Nonetheless,

Cites (6)

1. Judgment under Uncertainty: Heuristics and Biases
   Tversky, Amos, Kahneman, Daniel · 1975 · Utility, Probability, and Human Decision Making
2. The psychology of sunk cost
   Arkes, Hal R, Blumer, Catherine · 1985 · Organizational Behavior and Human Decision Processes
3. Knee-deep in the big muddy: a study of escalating commitment to a chosen course of action
   Staw, Barry M. · 1976 · Organizational Behavior and Human Performance
4. Adaptive strategy selection in decision making.
   Payne, John W., Bettman, James R., Johnson, Eric J. · 1988 · Journal of Experimental Psychology: Learning, Memory, and Cognition
5. The Escalation of Commitment To a Course of Action
   Staw, Barry M. · 1981 · The Academy of Management Review
6. Outcome Bias in Decision Evaluation
   Baron, Jonathan, Hershey, John C. · 1988 · Journal of Personality and Social Psychology

Show all 6 references

Cited by (24)

1. Representativeness revisited: Attribute substitution in intuitive judgment.
   Kahneman, Daniel, Frederick, Shane · 2002 · Heuristics and Biases
2. Accounting for the effects of accountability.
   Lerner, Jennifer S., Tetlock, Philip E. · 1999 · Psychological Bulletin
3. The Affect Heuristic
   Slovic, Paul, Finucane, Melissa, Peters, Ellen, MacGregor, Donald G. · 2002 · Heuristics and Biases
4. A Cross-Cultural Study on Escalation of Commitment Behavior in Software Projects1
   Keil, Mark, Tan, Bernard C. Y., Wei, Kwok-Kee, Saarinen, Timo, Tuunainen, Virpi, Wassenaar, Arjen · 2000 · MIS Quarterly
5. Support theory: a nonextensional representation of subjective probability
   Tversky, Amos, Koehler, Derek J. · 1994 · Psychological Review

See all 426