scholarly journals Mindfulness and decision making: sunk costs or escalation of commitment?

2020 ◽  
Vol 21 (3) ◽  
pp. 391-402
Author(s):  
Neil Schmitzer-Torbert
Keyword(s):  
Decision Making ◽  
Sunk Costs ◽  
Escalation Of Commitment

scholarly journals Mindfulness and decision-making: Sunk-costs or escalation of commitment?

2018 ◽  
Author(s):  
Neil Schmitzer-Torbert
Keyword(s):  
Decision Making ◽  
Sunk Costs ◽  
Escalation Of Commitment ◽  
Trait Mindfulness ◽  
Sunk Cost ◽  
Positive Health ◽  
Course Of Action ◽  
Cognitive Benefits ◽  
Positive Health Outcomes ◽  
The Relationship

Mindfulness is related to a number of positive health outcomes, such as decreased stress, anxiety and improved physical functioning. Recent studies have also identified a range cognitive benefits of mindfulness, including recent studies demonstrating that higher trait mindfulness and brief mindfulness inductions are associated with improved decision-making, and specifically to resistance to the influence of sunk-costs, where higher mindfulness is associated with increased willingness to discontinue a costly, but disadvantageous, course of action. However, some previous studies examining mindfulness and the sunk-cost bias have methodological limitations which make it difficult to determine if mindfulness is specifically related to sensitivity to the sunk-cost bias, or rather than to a general willingness to continue an unprofitable course of action (independent of the level of prior investment). The present study extends previous work by replicating the finding that trait mindfulness is positively related to resistance to the effects of sunk-costs, and also demonstrates that mindfulness is related to reduced escalation of commitment, an individual’s willingness to continue their commitment to a unprofitable course of action through the further investment of resources or time. Overall, trait mindfulness was most consistently related to reduced escalation of commitment, whereas the relationship between trait mindfulness and resistance to the effects of sunk-costs were less consistently observed

scholarly journals Escalation of Commitment: Supporting Role from Accountants

2021 ◽  
Vol 4 (2) ◽  
pp. 87
Author(s):  
Agil Novriansa ◽  
Ahmad Subeki ◽  
Aryanto Aryanto
Keyword(s):  
Decision Making ◽  
Undergraduate Students ◽  
Investment Decision ◽  
Investment Project ◽  
Capital Budgeting ◽  
Sunk Costs ◽  
Financial Accounting ◽  
Escalation Of Commitment ◽  
Sunk Cost ◽  
Investment Decision Making

Previous research has mostly examined the phenomenon of escalation of commitment in the context of decision making by managers in an investment project. However, in the capital budgeting process, before making investment decisions managers tend to consider information produced by accountants. This study examines the phenomenon of escalation of commitment using the perspective of supporting role of accountants as the party that provides information for investment decision making by managers, especially in the presence of sunk costs. This study uses a laboratory experimental method. The sample in this study are 156 undergraduate students majoring in Accounting who had passed Financial Accounting and Management Accounting courses. Based on the results of the independent sample t-test, it shows that accountants who experienced sunk cost conditions tend to provide reports that directed managers towards escalation of commitment behavior compared to accountants who do not experience sunk cost conditions. The presence of sunk cost makes accountants have better mind frame to get the possibility of profit compared with a definite loss so that the decisions they make tend to provide reports that lead to the escalation of commitment behavior.

Escalation of Commitment with Transparent Future Outcomes

2005 ◽  
Vol 52 (1) ◽  
pp. 67-73 ◽  
Author(s):  
Niklas Karlsson ◽  
Tommy Gärling ◽  
Nicolao Bonini
Keyword(s):  
Decision Making ◽  
Sunk Costs ◽  
Escalation Of Commitment ◽  
Full Information ◽  
Comprehensive Understanding ◽  
Alternative Investments ◽  
Knowing That ◽  
Course Of Action ◽  
Future Outcomes

Abstract. A frequent case of irrational decision making is the tendency to escalate commitment to a chosen course of action after unsuccessful prior investments of money, effort, or time (sunk costs). In previous research it is argued that escalation does not occur when future outcomes and alternative investments are transparent. Inconsistent with this argument, in an experiment in which undergraduates were presented fictitious investment problems with sunk costs, escalation was demonstrated when full information was given about investment alternatives and estimates of future returns. Thus, it is indicated that people may escalate despite knowing that it will not make them economically better off. A more comprehensive understanding of escalation requires disentangling people’s noneconomic reasons for escalation.

The influence of sunk costs, personal responsibility and culture on the tendency of accountants to facilitate escalation of commitment

2014 ◽  
Vol 26 (3) ◽  
pp. 374-391 ◽  
Author(s):  
Peni Fukofuka ◽  
Neil Fargher ◽  
Zhe Wang
Keyword(s):  
Decision Making ◽  
Developing Economies ◽  
Personal Responsibility ◽  
Sunk Costs ◽  
Escalation Of Commitment ◽  
Sunk Cost ◽  
Content Type ◽  
Supportive Role ◽  
The Impact

Purpose – This purpose of this study is to further the study of escalation of commitment by considering the supportive role of accountants in providing reports that favour continuation of unprofitable projects and whether this role is influenced by culture. Research on the escalation of commitment suggests that the decision to commit resources to a failing project is due to several factors that include sunk costs, personal responsibility and culture. Design/methodology/approach – This study employs a between-subjects design to examine accountants’ willingness to provide a report that facilitates continuation of an unprofitable project. The manipulated independent variables are sunk cost (present or absent), the level of reporting responsibility (high or low) and culture (Pacific Islands or Australia). Findings – Our results show that the presence of sunk cost is a motivation for accountants to provide reports that favour continuation of an unprofitable project. The results on cultural difference are also consistent with the contention that culture is influential in decision-making with respect to providing reports that favour continuation of an unprofitable project. We do not, however, find evidence consistent with a personal responsibility affect using the manipulation defined in this study. Research limitations/implications – Consistent with this type of research, the results must be interpreted with respect to the specific design choices used in the experiment. Practical implications – Continued research is needed to examine the impact of sunk costs and specific attributes of culture, such as the willingness to follow superiors, on the escalation of commitment to unprofitable projects. The mitigation of such effects through education of accountants to provide reports that do not favour continuation of unprofitable projects would, for example, be of interest to aid agencies and others investing in projects in developing economies in particular. Originality/value – While previous research generally examines the decision-making role of managers in escalation of commitment to unprofitable projects, this study examines the supportive role that accountants play in facilitating managers’ escalation decisions. This issue is studied within a context examining the potential cultural impact of respect for authority.

Vicarious entrapment: Your sunk costs, my escalation of commitment

2011 ◽  
Author(s):  
Brian C. Gunia ◽  
Niro Sivanathan ◽  
Adam Galinsky
Keyword(s):  
Sunk Costs ◽  
Escalation Of Commitment

Decision rules, escalation of commitment and sensitivity to framing in group decision-making

2016 ◽  
Vol 54 (7) ◽  
pp. 1649-1668 ◽  
Author(s):  
Petru Lucian Curseu ◽  
Sandra G. L. Schruijer ◽  
Oana Catalina Fodor
Keyword(s):  
Decision Making ◽  
Decision Rule ◽  
Group Decision Making ◽  
Group Decision ◽  
Decision Rules ◽  
Escalation Of Commitment ◽  
Group Level ◽  
Content Type ◽  
The Impact ◽  
Collaborative Decision

Purpose – The purpose of this paper is to test the influence of collaborative and consultative decision rules on groups’ sensitivity to framing effect (FE) and escalation of commitment (EOC). Design/methodology/approach – In an experimental study (using a sample of 233 professionals with project management experience), the authors test the effects of collaborative and consultative decision rules on groups’ sensitivity to EOC and FE. The authors use four group decision-making tasks to evaluate decision consistency across gain/loss framed decision situations and six decision tasks to evaluate EOC for money as well as time as resources previously invested in the initial decisions. Findings – The results show that the collaborative decision rule increases sensitivity to EOC when financial resources are involved and decreases sensitivity to EOC when time is of essence. Moreover, the authors show that the collaborative decision rule decreases sensitivity to FE in group decision making. Research limitations/implications – The results have important implications for group rationality as an emergent group level competence by extending the insights concerning the impact of decision rules on emergent group level cognitive competencies. Due to the experimental nature of the design, the authors can probe the causal relations between the investigated variables, yet the authors cannot generalize the results to other settings. Practical implications – Managers can use the insights of this study in order to optimize the functioning of decision-making groups and to reduce their sensitivity to FEs and EOC. Originality/value – The study extends the research on group rationality and it is one of the few experimental attempts used to understand the role of decision rules on emergent group level rationality.

Nonrepresentative Representatives: An Experimental Study of the Decision Making of Elected Politicians

2017 ◽  
Vol 112 (2) ◽  
pp. 302-321 ◽  
Author(s):  
LIOR SHEFFER ◽  
PETER JOHN LOEWEN ◽  
STUART SOROKA ◽  
STEFAAN WALGRAVE ◽  
TAMIR SHEAFER
Keyword(s):  
Decision Making ◽  
Direct Evidence ◽  
Sunk Costs ◽  
Decision Makers ◽  
Strategic Decision ◽  
Personality Profiles ◽  
Future Time ◽  
Policy Choices ◽  
The Status ◽  
Considerable Body

A considerable body of work in political science is built upon the assumption that politicians are more purposive, strategic decision makers than the citizens who elect them. At the same time, other work suggests that the personality profiles of office seekers and the environment they operate in systematically amplifies certain choice anomalies. These contrasting perspectives persist absent direct evidence on the reasoning characteristics of representatives. We address this gap by administering experimental decision tasks to incumbents in Belgium, Canada, and Israel. We demonstrate that politicians are as or more subject to common choice anomalies when compared to nonpoliticians: they exhibit a stronger tendency to escalate commitment when facing sunk costs, they adhere more to policy choices that are presented as the status-quo, their risk calculus is strongly subject to framing effects, and they exhibit distinct future time discounting preferences. This has obvious implications for our understanding of decision making by elected politicians.

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