Information load in escalation situations: combustive agent or counteractive measure?

Peter Gordon Roetzel (), Burkhard Pedell and Daniel Groninger
Additional contact information
Peter Gordon Roetzel: Technische Hochschule Aschaffenburg
Burkhard Pedell: University of Stuttgart
Daniel Groninger: University of Stuttgart

Journal of Business Economics, 2020, vol. 90, issue 5, No 5, 757-786

Abstract: Abstract This experimental study analyzes how a key factor, information load, influences decision making in escalation situations, i.e., in situations in which decision makers reinvest further resources in a losing course of action, even when accounting information indicates that the project is performing poorly and should be discontinued. This study synthesizes prior escalation research with information overload and investigates how different levels of information load influence the escalation of commitment. Our findings reveal a U-shaped effect of information load: When decision makers face negative feedback, a higher information load mitigates the escalation tendency up to a certain point. However, beyond this point, more information reinforces the escalation tendency. Moreover, we find that the type of feedback affects self-justification, and we find a negative and significant interaction between information load and self-justification in negative-feedback cases. Thus, studies investigating escalation of commitment should control for self-justification and information load when utilizing high levels of information load. Finally, in the positive-feedback condition, higher information load encourages decision makers to continue promising courses of action, i.e., increases decision-making performance.

Keywords: Escalation of commitment; Experimental research; Information load; Responsibility; Self-justification (search for similar items in EconPapers)
JEL-codes: C91 D80 M20 M41 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s11573-020-00987-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:jbecon:v:90:y:2020:i:5:d:10.1007_s11573-020-00987-x

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/11573

DOI: 10.1007/s11573-020-00987-x

Access Statistics for this article

Journal of Business Economics is currently edited by Günter Fandel

More articles in Journal of Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().