Escalation behavior in domains related and unrelated to decision makers' academic background

Based on Staw and Ross's (1987) analysis of escalation behavior it was hypothesized that (a) those who are involved with projects related to their academic background will tend to persist in a losing course of action and to judge the situation as reversible more than those who have to make decisions in areas unrelated to their specialty; (b) providing information that the loss is irreversible will decrease the tendency to invest additional resources. A secondary goal of the study was to examine whether there would be any difference in sunk cost decisions when the resource invested is financial as compared to time. Using a 2 × 2 × 2 factorial design, a total of 296 students were given eight different scenarios in which relatedness of decision subject-matter to academic background, reversibility of the situation, and type of resources (time or money) were the independent variables, and commitment to a course of action was the dependent variable. The results confirmed the hypotheses. No significant main effect for type of resources (time vs. money) was found. Theoretical and practical implications of the results are discussed.