The impact of biased information and corresponding meta-information on escalating commitment

Thomas Schultze and Stefan Schulz-Hardt

Journal of Economic Psychology, 2015, vol. 49, issue C, 108-119

Abstract: Research on escalation of commitment suggests that decision-makers make use of additional information when confronted with a potentially losing course of action. Veridical information is a helpful tool when deciding whether to continue or de-escalate commitment. However, field data suggests that one primary source of information, namely information provided by experts, is often biased toward the continuation of projects. This bias is partly the result of attempts to influence decision-makers to escalate their commitment. Previous research has, so far, not addressed the question of how decision-makers in an escalation context utilize meta-information that makes them aware of such biases. In three experiments, we show that decision-makers act in accordance with expert advice: they further escalate their commitment when the experts suggest continuation of a failing project, and they de-escalate their commitment when the experts argue in favor of withdrawal (Experiment 1). When participants are made aware of the possibility that the expert advice is biased, the impact of this advice is reduced (Experiment 2). Most importantly, when decision-makers were made aware beyond doubt that the experts aimed to manipulate them, they also relied on the information less, but they failed to fully ignore it (Experiment 3). In sum, our data suggest that decision-makers in an escalation context are prone to attempts at manipulation as they cannot fully ignore biased advice even when the deceptive motive of their advisors is disclosed to them.

Keywords: Judgment and decision making; Sunk cost; Escalation of commitment; Deception; Social influence; Advice taking (search for similar items in EconPapers)
JEL-codes: D23 D81 D82 D83 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:49:y:2015:i:c:p:108-119

DOI: 10.1016/j.joep.2015.05.005

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