The Escalation Effect

The Escalation Effect also known as an Entrapment, is basically when a commitment to a failing course of action is increased to justify the previous investments that have already been made to the commitment (Haslam et al., 2006; Keil et al., 2007; Staw, 1997). 

It has been shown in experiments that groups are more likely to escalate commitment to a failing project and are likely to do so in more extreme ways than are individuals (Dietz-Uhler, 1996; Seibert & Goltz, 2001). Groups such as businesses or even the government have been shown to incur huge costs for the simple fact that they continue to invest more money, time, and other resources into a projects that honestly should have been terminated (Ross & Staw, 1986). 

Personal Example: Personal Finance

In my Personal Finance class in my senior year of high school, we created a somewhat legit ‘company’ (putting our own money into the product and actually selling it). Our company was known as Booty Bands and basically the main product was these bands one could wear on top of their sweatpants or leggings (because sweatpants already had that has part of the style at the time) and there were different patterns and colors and people could alter the bands. We even had headbands as well.

This was probably the dumbest product we could have thought of or one person thought of and that the majority voted for. The product was bad, we weren’t selling more than we were having be made, in others words the amount of money we had put in was not worth the product and we weren’t getting our money back.

Yet for some odd reason we kept ordering new designs and we kept producing more. Each girl in the class had to put their own money into getting the bands produced. We had to sell a significant amount or in my case buying some for myself for ‘advertisement’, but mostly so I wouldn’t get a bad grade.

We even ended up joining a real competition for real businesses created by high school students in the area. This was an idea so that we could increase awareness of our product and increase sells, so the plan was to send a few girls there, win or at the very least get the product noticed. So to be equal, the whole entire class had to spend more of our own money to send the girls to this two day competition. 

Eventually the company of Booty Bands ended when the class ended, though a few girls tried to keep it going afterwards. Honestly the whole entire idea in my opinion was a stupid one, but what really got me was the continuing spending of money and time into this project and the fact that the more money and time we spent on it, the more we had to keep giving. 

I honestly felt and still feel like we could have just declared the project/business a failure and maybe right a paper on why it failed. Instead of spending everybody’s money and time on something that should have ended long before it ever did. 

It was personal finance class, but honestly that project didn’t teach us anything, other than the whole entire idea “of giving your money if you want your business succeed”. Though it was the original intent of the project, it did actually turned out to be lesson in Escalation Effects. 

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References 

Dietz-Uhler, B. (1996). The escalation of commitment in political decision-making groups: A social identity approach. European Journal of Social Psychology, 26, 611-629.  

Haslam, S. A., Ryan, M. K., Postmess, T., Spears, R., Jetten, J., & Webley, P. (2006). Sticking to our guns: Social identity s basis for the maintenance of commitment to faltering organizational projects. Journal of Organizational Behavior, 27, 607-623.

Keil, M., Depledge, G., & Rai, A. (2007), Escalation: The role of problems recognition nd conitive bias. Decision Sciences, 38, 391-421.

Ross, J., & Staw, B. M. (1986). Expo 86: An escalation prototype. Adminstrative Science Quarterly, 31-274-297.

Seibert, S. E., & Goltz, S. M. (2001). Comparison of allocations by individuals and interacting groups in an escalation of commitment situation. Journal of Applied Social Psychology, 31, 134-156.

Staw, B. M. (1997).The escalation of commitment: An update and appraisal. In Z. Shapira (Eds.). Organizational decision making Cambridge series on judgment and decision making (pp. 191-215). New York: Cambridge University Press.