Escalation of Commitment as Sunk-Cost Justification: Impact of Individual Status and Reputation

Sandeep Yadav () and Deepak Dhayanithy ()
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Deepak Dhayanithy: Indian Institute of Management Kozhikode

No 383, Working papers from Indian Institute of Management Kozhikode

Abstract: Extant literature on escalation of commitment have focused mainly on group, firm and external macro level factors as determinant of firm level decisions. This study examines the impact of individual-level factors on the escalation of commitment (EOC) of team decisions. We draw from the self-justification theory and signaling perspective to examine the impact of sunk cost, status, and reputation of EOC. We used longitudinal data from 2008 to 2019 of the Indian Premier League (IPL) to test the proposed hypotheses. We found sunk cost and player reputation are positively related to the escalation of commitment. We also found the moderating effect of player status on the sunk cost and EOC relationship.

Keywords: Escalation of Commitment(EOC); Indian Premier League(IPL) (search for similar items in EconPapers)
Pages: 3 pages
Date: 2020-06
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