An economic perspective on escalating commitment

Ming‐Je Tang

Strategic Management Journal, 1988, vol. 9, issue S1, 79-92

Abstract: This paper highlights the significance of escalating commitment to strategy formulation, briefly examines behavioral explanations of escalating commitment to a losing course of action, and finally proposes an economic theory of the escalating commitment phenomenon. An example of escalating commitment to an outdated technology is presented. It is shown mathematically that there are economic justifications for escalating commitment to a failing strategy. Strategic implications for the first move advantage and for the U.S. steel, auto and semiconductor industries are discussed.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://doi.org/10.1002/smj.4250090709

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:9:y:1988:i:s1:p:79-92

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().