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Despite extensive research on organizational crises, there is a need for deeper insight into the personalities of managers involved in crisis management and the interplay of personality traits in crisis preparedness. Crisis management (CM) is pivotal in today's complex and rapidly changing world, involving the strategic process of anticipating, preparing for, and effectively responding to crises that can potentially disrupt an organization. Recent surges in business failures and related corporate crises, along with the varied consequences of COVID-19, emphasize the acute need for effective CM, particularly crisis preparedness (CP). Given that CP in organizations is influenced by various factors, we aimed to develop a model that accurately assesses the impact of individual and situational aspects on CP, drawing on crisis management theory and trait theory as the overarching theoretical basis. Based on a sample of 314 executives and utilizing moderation-mediation analysis, our main findings reveal that narcissistic rivalry fully mediates the positive relationship between conscientiousness and CP. Additionally, Escalation of Commitment (EoC) moderated the relationship between conscientiousness and narcissistic rivalry, such that managers with high conscientiousness disposed to EoC show a desirable low level of rivalry. In conclusion, while EoC is typically viewed as a negative organizational trait, organizations are advised to prioritize hiring conscientious managers who exhibit a propensity for EoC, provided that the organization can effectively manage this tendency. By taking the proper steps, organizations can benefit from the advantages of managers disposed to EoC while reducing crisis risks. Plain Language Summary: How personality traits affect crisis readiness: The interplay of narcissism, conscientiousness and escalation of commitment Research on organizational crises often overlooks the personalities of managers who handle these situations. Effective crisis management is essential in today's unpredictable world, involving planning for and responding to potential disruptions. With recent increases in business failures and crises, especially due to COVID-19, the need for strong crisis preparedness is clear. Our study focuses on how individual personality traits and situational factors influence crisis preparedness. We analyzed data from 314 executives and found a positive interplay of narcissistic rivalry and conscientiousness on crisis preparedness. We also discovered that highly conscientious managers who tend to escalation have lower levels of rivalry. Despite escalation generally being seen as negative, we suggest that organizations should hire conscientious managers with a tendency for escalation, as long as they can manage this trait effectively. This approach can help organizations harness the benefits of these managers while minimizing crisis risks. [ABSTRACT FROM AUTHOR]

From #Pizzagate to anti‐vaxxers, passing by 9/11 or Obama 'birthers', we have seen many communities growing on social media around conspiracy theories and thereby gaining public prominence. Debunking or presenting alternative views to conspiracy theories often fails because individuals within these communities can grow more resolute, encouraging and reinforcing their beliefs online. Instead of withering in the face of contradiction, such communities hunker down; escalating their commitment to their conspiratorial beliefs. By interacting over social media platforms, they develop a sense of a shared social identity, which in turn fosters escalating behaviours and can lead to radicalization. For some people, the choice of abandoning or moderating these beliefs is unthinkable because they are too deeply invested to quit. This study advances a second‐order affordance for identity‐driven escalation that explains the process of conspiracy theory radicalization within online communities. We offer a theoretical account of the way social media platforms contribute to escalating commitment to conspiracy radicalization. We show how the sequential and combined actualization of first‐order affordances of the technology enables a second‐order affordance for escalation. [ABSTRACT FROM AUTHOR]

This article investigates the relationship between the decision-making bias known as escalation of commitment and the turnover of non-CEO executives in top management teams. The phenomenon of escalation of commitment is observed when decision makers persist with business investments that have a low likelihood of success. Theoretical explanations for the association between executive turnover and escalation include self-justification and reputation protection. Top managers may conceal prior errors, escalate commitment to earlier decisions, and exit the organization before the outcome of decisions is observed. Successor managers do not have a commitment to earlier decisions and have the capability to stop investments that are discovered to be failing. Empirical analysis utilizing a sample of over 1600 U.S. firms confirms that departures by non-CEO executives from top management teams are associated with an increased likelihood of new reporting of discontinued operations and extraordinary items by firms and a reduction in the firms' performances relative to their industry. These effects reflect de-escalation activities and are amplified in the years concurrent with and following a joint departure of multiple management team members. Prior empirical studies on escalation and de-escalation behavior focused on CEO turnover. The contribution of this article is its documenting of the key role of non-CEO managers and team turnover in the context of escalation. [ABSTRACT FROM AUTHOR]

In the public-private partnership (PPP) project, social factors are an important reason that leads to the escalation of commitment (EOC) of investors. Firstly, the study identified ten social factors that influence investor's EOC in PPP projects by literature review. Then, 126 valid data were collected by situational questionnaire, and regression models of social factors that influence investors' EOC were built at different stages of project completion. Finally, the study constructed the probability model of the investors' EOC in different stages. It is found that with the progress of the project, investors are more and more inclined to EOC. In different stages, the social factors that play a major role in the investors' EOC are different. Probability models based on the influence of social factors have good prediction ability. The findings can help engineering managers predict the risk of investor's EOC in advance and formulate preventive measures in different stages to promote the success of the project. [ABSTRACT FROM AUTHOR]

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This study examines the impact of individual-level factors on organisations' escalation of commitment (EOC) using self-justification theory and institutional perspective. We use the Cox proportional hazard model on Indian Premier League (IPL) players’ data from 2008 to 2019 to test the proposed hypotheses. We find that player sunk cost (salary paid), reputation, and high status are positively related to the IPL team's EOC (player survival in the same team) for the particular player. Results show that player reputation and high status positively moderate the relationship between player level sunk cost and the IPL team's EOC for the particular player.

AbstractThis research attempts to apply Image Theory to examine whether the tendency to continue the initial strategy or maintain the status quo known as escalation of commitment (EoC) from institutional investors leads to positive investment performance in unstable real environmental conditions with certain changing trends. In the equity market, investors are always faced with the option of maintaining their existing portfolio (initial strategy) or modifying it (generate emergent strategy) to increase assets as the goal. However, they have a tendency to EoC. Based on this situation, the authors conduct a quantitative study with covariance-based structural equation models (CB-SEM) approach one of the fund management industry in the Indonesian equity market during bearish conditions in the midst of the 2008 global economic crisis and bullish conditions during the crisis recovery as the background. This study shows that EoC is not always associated with more negative performance because it can result in more positive performance in high image compatibility state.

Entrepreneurship requires continued investment of time to build a successful venture. But how might we predict the amount of time an entrepreneur will invest in their venture? This research proposes that prior time invested, in conjunction with business plan usage and opportunity confidence, helps answer this question. Using data from a panel study of entrepreneurs in Australia, results show that most nascent entrepreneurs, on average, increased the time they invested in their ventures over the course of the study. However, the combination of actively using a business plan with high and moderate levels of venture confidence resulted in a decrease of time investment, as opposed to an increase when venture confidence was low. This may suggest that when supplemented by a business plan, the fear of failure motivates entrepreneurs to work harder towards achieving a goal, even when the perceived possibility of success is lower. [ABSTRACT FROM AUTHOR]

This study explores how project names may influence the tendency to escalate commitment through two experiments. Our findings from Experiment 1 show that a positive project name evokes positive affective reactions to the project. These, in turn, are associated with a greater willingness to continue a failing project. Results from Experiment 2 show that a technological project name can similarly evoke more positive affective reactions and a greater willingness to continue but only for decision makers with high technology readiness. For decision makers with low technology readiness the effect was reversed. [ABSTRACT FROM AUTHOR]

Schools are the most common site to implement evidence-based prevention programs and practices (EBPs) to improve behavioral and mental health outcomes among children and adolescents. Research has highlighted the critical role of school administrators in the adoption, implementation, and evaluation of such EBPs, focusing on the factors they should consider during the adoption decision and the behaviors needed for successful implementation. However, scholars have only recently begun to focus on the de-adoption or de-implementation of low-value programs and practices to make room for evidence-based alternatives. This study introduces escalation of commitment as a theoretical framework for understanding why school administrators may stick with ineffective programs and practices. Escalation of commitment is a robust decision-making bias in which people feel compelled to continue with a course of action even when performance indicators suggest it is not going well. Using grounded theory methodology, we conducted semi-structured interviews with 24 building- and district-level school administrators in the Midwestern United States. Results suggested that escalation of commitment occurs when administrators attribute the underlying causes of poor program performance not to the program itself but instead to issues related to implementation, leadership, or the limitations of the performance indicators themselves. We also identified a variety of psychological, organizational, and external determinants that accentuate administrators' continuance of ineffective prevention programs. Based on our findings, we highlight several contributions to theory and practice. [ABSTRACT FROM AUTHOR]

This paper aims to propose a theoretical framework of the dualistic model of entrepreneurial passion (DMEP) and entrepreneurial performance. The framework is based on both the Self-Determination Theory (SDT) and Mood Maintenance Hypothesis (MMH). To gather information, we conducted a comprehensive review of existing conceptual and empirical literature on the topic and synthesized the findings. The findings reveal that the link between DMEP and entrepreneurial performance is distal, with the proposed DMEP having a direct relationship on entrepreneurial performance, and indirect impacts that are serially mediated by factors such as entrepreneurial emotions, risk-taking, competitive aggressiveness, and escalation of commitment. The study presents a succinct framework for the regulation of entrepreneurial passion and its impact on entrepreneurial performance. The study extends the ontological field of the dualistic model of entrepreneurial passion, and the framework is very likely to be validated by empirical research in the future. The practical implications of this study are significant as it provides a thorough comprehension of the connection between entrepreneurial passion and entrepreneurial performance. This information can be used to develop effective strategies and interventions in the field of entrepreneurship. [ABSTRACT FROM AUTHOR]

Two potentially costly errors are common in sequential investment decisions: sticking too long to a failing course of action (escalation of commitment), and abandoning a successful course of action prematurely. Past research has mostly focused on escalation of commitment, and identified three critical determinants: personal responsibility, preferences for prior decisions, and decision framing. We demonstrate in three studies using an incentivized poker inspired task that these determinants of escalation reliably lead decision makers to keep investing even when real money is on the line. We observed in Experiments 1, 2 and 3 that reinvestments were more likely when decision makers were personally responsible for prior decisions. This likelihood was also increased when the decision makers had indicated a preference for initial investments (Experiments 2 and 3), and when outcomes were framed in terms of losses as compared to gains (Experiment 3). Both types of decision errors - escalation of commitment and prematurely abandoning a course of action - could be traced to the same set of determinants. Being personally responsible for prior decisions, having a preference for the initial investment, and loss framing did increase escalation, whereas lacking personal responsibility, having no preference for the initial investment, and gain framing increased the likelihood of prematurely opting out. Finally, personal responsibility had a negative effect on decision quality, as decision-makers were still more likely to reinvest when they were personally responsible for prior decisions, than when prior decisions were assigned optimally by an algorithm (Experiments 2 and 3). [ABSTRACT FROM AUTHOR]

Escalation of Commitment (EoC) relates to decision-makers' tendency to commit resources to a failing course of action. The current study attempts to expand the understanding of personality traits as factors that potentially engender EoC by offering an EoC-prone personality profile. Our moderated-mediation model illustrates how extraversion affects EoC through the mediations of sensation-seeking, and how hubris moderates the effect of sensation-seeking on EoC. The results are based on data gleaned from an online questionnaire completed by 314 respondents from various managerial levels employed among wide-ranging Israeli industries. Data was obtained via network respondent-driven sampling from a 500 managers' sample. The model was tested using Hayes's Process procedure. Sensation-seeking was found to fully mediate the relationship between extraversion and EoC, while hubris was found to moderate the relationship between sensation-seeking and EoC. Managerial implications and future research directions are suggested. [ABSTRACT FROM AUTHOR]

The sunk cost effect is the tendency for an individual's decision making to be impacted by unrecoverable previous investments of resources. Soman (2001) found that sunk cost effect is weaker for time than for money (Studies 1 and 2) and that the facilitation of money-like accounting strengthens the sunk cost effect for time (Study 5). We conducted a Registered Report of a close, high-powered replication and extension of Soman's (2001) Studies 1 and 2 and a conceptual replication of his Study 5 with an online sample of US American Amazon Mechanical Turk (N = 821). We found support for differences between sunk money costs and sunk time costs in Study 1 (original: Φc = .61 [.43, .78]; replication: Φc = .38 [.31, .45]), yet not in Study 2, in which we found sunk cost effects for both money and time (original: money - Φc = .32 [.12, .52], time - Φc = .02 [.00, .18]; replication: money - Φc = .23 [.14, .33], time - Φc = .32 [.23, .42]). In Study 5, we found no support for facilitation of money-like accounting as strengthening the sunk time cost effect. Materials, data, and code are available on: https://osf.io/pm264/. [ABSTRACT FROM AUTHOR]

Why did the territorial conflict between the governments of Catalonia and Spain escalate to the point of extreme institutional disruption in October 2017? The present article explains this crisis – a declaration of independence followed by the imposition of direct rule – as the outcome of an Escalation of Commitment behaviour. By examining the iterative relationship between both governments, the article shows that they were trapped in a failing course of action, unable to withdraw from their early political decisions. Despite facing increasingly negative outcomes from their choices, both sides had already invested too much political capital to quit. Expectations and self-justification attitudes account for the escalation behaviour, together with a radicalized decision environment. The findings have broader implications for the study of nationalist politics: they show that the commitment to early decisions mediated by the existence of strong political incentives against compromise may lead to the escalation of territorial conflicts. [ABSTRACT FROM AUTHOR]

How are social entrepreneurs different from commercial entrepreneurs? This study sheds light on this issue by applying the perspective of entrepreneurial cognition and by arguing that social entrepreneurs are even more susceptible to cognitive biases than commercial entrepreneurs. The empirical study of 205 Swiss entrepreneurs could confirm that social entrepreneurs tend to be more overconfident and prone to escalation of commitment than commercial entrepreneurs, while the study found no differences for illusion of control. The findings indicate that cognitive biases are an important puzzle piece to understand the differences between social and commercial entrepreneurs. [ABSTRACT FROM AUTHOR]

Persisting with a losing project (i.e., a new product development project facing superior competition) is a social endeavor that can increase the costs of failure to the entrepreneur and other stakeholders. Yet, it tends to be explained almost exclusively in terms of intrapersonal predictors, such as the sunk cost fallacy. This paper examines whether, how, and under which conditions interpersonal influence, such as the intensity of a team's recommendation to persist with a losing project, encourages entrepreneurs to persist. Drawing from the psychologies of escalation and self-regulation, we build a model of entrepreneurs' undue persistence that we test through experimental design and conjoint analysis. We find that an entrepreneur's decision to persist with a losing project is determined partly by the team's recommendation to persist and that the strength of this effect varies across entrepreneurs based on their self-regulation and experience. [ABSTRACT FROM AUTHOR]

Two potentially costly errors are common in sequential investment decisions: sticking too long to a failing course of action (escalation of commitment), and abandoning a successful course of action prematurely. Past research has mostly focused on escalation of commitment, and identified three critical determinants: personal responsibility, preferences for prior decisions, and decision framing. We demonstrate in three studies using an incentivized poker inspired task that these determinants of escalation reliably lead decision makers to keep investing even when real money is on the line. We observed in Experiments 1, 2 and 3 that reinvestments were more likely when decision makers were personally responsible for prior decisions. This likelihood was also increased when the decision makers had indicated a preference for initial investments (Experiments 2 and 3), and when outcomes were framed in terms of losses as compared to gains (Experiment 3). Both types of decision errors – escalation of commitment and prematurely abandoning a course of action – could be traced to the same set of determinants. Being personally responsible for prior decisions, having a preference for the initial investment, and loss framing did increase escalation, whereas lacking personal responsibility, having no preference for the initial investment, and gain framing increased the likelihood of prematurely opting out. Finally, personal responsibility had a negative effect on decision quality, as decision-makers were still more likely to reinvest when they were personally responsible for prior decisions, than when prior decisions were assigned optimally by an algorithm (Experiments 2 and 3).

First demonstrated by Staw (1976), escalation of commitment is the tendency for an individual to increase their commitment to a failing course of action when they are personally responsible for the negative consequences. An attempt was made to replicate this finding and test whether individual differences in numeracy and cognitive reflection could help explain such an effect. No evidence for escalation of commitment amongst the participants was found (N = 365). Participants simply invested more in more promising projects. Also, no evidence was found that numeracy or cognitive reflection predict escalation behaviour. The validity of escalation of commitment behaviour is discussed which suggests that future work should look to explore the boundary conditions of such an effect.

Danish studies of intimate partner violence (IPV) using police data are scarce, in part because access to records had been limited. The present study reduces critical gaps in the scholarly literature by examining IPV offending patterns in Denmark, using nearly 10,000 IPV incidents reported to the North Zealand Police, Denmark (2015–2019). We explore a common framework for analysing IPV, by observing (a) frequency, (b) severity, (c) intermittency, (d) escalation, and (e) concentrations of IPV. Harm is estimated using the Danish Crime Harm Index, which is based on the sentencing guidelines as an objective rod for estimating severity. Findings support the gender-based explanation for IPV, with males causing considerably more and higher harm than female offenders. Furthermore, the likelihood of re-offending only predicable not for 1/3 of the IPV offender population and rarely for high-harm incidents as they usually have no prior or no subsequent contact with the police. While there is a tendency towards escalation of harm between contacts to the police for all offenders, no such consistent pattern is discernible for IPV offenders who cause serious harm to their victims. Implications for policy and future research are discussed. [ABSTRACT FROM AUTHOR]

Policy conflict is gaining attention in policy studies. In this paper, we explore the relation between emotional storylines and policy conflict escalation in the case of the Dutch gasquakes in the north of the country. Based on a longitudinal analysis of emotional storylines in 1308 newspaper articles and additional empirical data we find that Dutch subnational governmental actors as well as citizen action groups discursively express emotional storylines about anxiety/fear, anger, and contempt in relation to discursive expressions of trustworthiness/distrust. Over time, specific combinations of these emotional storylines shape the interpretation of the problem and point toward responsible actors. Also the way in which specific sequences of emotional storylines develop (particularly from fear to anger) suggests a discursive escalation. In addition, discursive escalation can be found in the increased intensity of specific emotional storylines. We conclude that the combinations, sequencing and increasing intensity of the emotional storylines suggest a process of emotionally expressed escalation, which we have only just begun to explore. [ABSTRACT FROM AUTHOR]

Drawing on recent advancement in behavioral decisionmaking theory and the escalation-of-commitment literature, we examine how managers’ perceptions of threats and opportunities in the external environment may shape their decision to escalate investment in a failing new product development (NPD) project. We test our theoretical model with two studies: first, a behavioral decision-making experimental study with a sample of 128 managers; and, second, an interview study with 12 managers. Our results show that managers’ perceptions of environmental opportunities and business threats significantly shape their decision to escalate commitment and that the impact of such managerial perceptions on escalating tendency is contingent on the stage of the innovation process. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this study is to investigate whether, in the context of making a go/no-go decision regarding a failing new product, the use of a stopping rule and/or a new decision-maker would reduce the escalation of commitment (EOC). Design/methodology/approach – This study uses a classroom experiment design and uses logistic regression and a chi-square test to analyze its data. Findings – The findings show that both responsible and non-responsible participants are more likely to perceive the negative performance of a new product as less negative and believe that the goal for the product can be reached when there is a stopping rule and proximal negative feedback indicates a level of performance below but very close to it than when there is no stopping rule. Therefore, they are more likely to continue the failing new product, whether they are responsible for the product or not. However, non-responsible decision-makers are more likely than their responsible counterparts to discontinue the failing new product in the absence of a stopping rule. Research limitations/implications – This paper extends the theory of EOC by showing that the use of a stopping rule and/or a new decision-maker may not reduce EOC. Practical implications – This paper provides useful guidelines for managers on how to reduce EOC. Originality/value – The originality and value of this paper are found in the investigation of a situation in which the use of a stopping rule and/or a new decision-maker may not reduce the EOC.

Abstract Background Escalation of commitment is a common bias in human decision making. The present study examined (1) differences in neural recruitment for escalation and de-escalation decisions of prior investments, and (2) how the activations of these brain networks are affected by two factors that can arguably modulate escalation decisions: (i) self-responsibility, and (ii) framing of the success probabilities. Results Imaging data were obtained from functional magnetic resonance imaging (fMRI) applied to 29 participants. A whole-brain analysis was conducted to compare brain activations between conditions. ROI analysis, then, was used to examine if these significant activations were modulated by two contextual factors. Finally, mediation analysis was applied to explore how the contextual factors affect escalation decisions through brain activations. The findings showed that (1) escalation decisions are faster than de-escalation decisions, (2) the corresponding network of brain regions recruited for escalation (anterior cingulate cortex, insula and precuneus) decisions differs from this recruited for de-escalation decisions (inferior and superior frontal gyri), (3) the switch from escalation to de-escalation is primarily frontal gyri dependent, and (4) activation in the anterior cingulate cortex, insula and precuneus were further increased in escalation decisions, when the outcome probabilities of the follow-up investment were positively framed; and activation in the inferior and superior frontal gyri in de-escalation decisions were increased when the outcome probabilities were negatively framed. Conclusions Escalation and de-escalation decisions recruit different brain regions. Framing of possible outcomes as negative leads to escalation decisions through recruitment of the inferior frontal gyrus. Responsibility for decisions affects escalation decisions through recruitment of the superior (inferior) gyrus, when the decision is framed positively (negatively).

This research aimed to analyze the moderating effect of interpersonal affect in the relationship between the evaluator's prior commitment and subjective performance evaluation. As method, the 3x2 experiment was used in a sample composed of 200 professionals and academics from the management area. The data was analyzed using the Mann-Whitney U test and Tobit regression. The results show that the evaluator's prior commitment and interpersonal affect positively and significantly influence the probability that the manager will provide the employee a promotion. In the moderation analysis, it was possible to see a positive and significant moderating effect, allowing us to infer that when the manager likes the employee, the commitment to the previous decision highly affects the probability of promotion of such employee. In other words, the manager gets more inclined to increase the commitment to the chosen decision. However, managers who favored employees' promotion provided similar performance ratings to those managers who did not participate in the hiring process. Therefore, the results do not point to the existence of the escalation bias in commitment in the analyzed context. Theoretically, this research contributes by inserting a new behavioral construct in the context of escalation bias (interpersonal affect). From a practical point of view, it contributes by providing evidence of how previous decisions interact with the evaluator's fondness for the subordinate to influence future decisions on performance evaluations, so they can be useful in helping companies to improve their performance evaluation systems, incorporating behavioral aspects of the decision makers. [ABSTRACT FROM AUTHOR]

Lock-in is defined as the tendency to continue with an inefficient decision or project proposal. The front-end phase is critical to project success, yet most studies have focused on lock-in in the implementation phase. Moreover, little is known about the way in which decision-makers perceive the risk of lock-in. In this paper we identify determinants of lock-in in the front-end phase and we reveal decision-makers' perceptions of risk of lock-in. Our findings show that risk attitudes towards lock-in vary with the level of risk aversion. However, this is not sufficiently acute to drive the level of regret needed to avoid lock-in. This implies that decision-makers do not accurately assess the risk of lock-in and as such their risk perceptions are a mediating factor in the formation of lock-in. Based on escalation of commitment, path dependency, and prospect theory, the main contribution lies in providing a more comprehensive understanding of lock-in in the front-end phase. [ABSTRACT FROM AUTHOR]

Abstract As project management scholars, we should not automatically assume that theories borrowed from other fields will produce desirable results when applied to the project management domain. To illustrate this, I focus on the problem of project escalation and discuss how three theories that have been widely touted as producing good outcomes in other fields may produce undesirable consequences when applied to the project escalation context. I argue that when good theories backfire, this creates an opportunity for project management scholars to expose the boundary conditions of such theories. [ABSTRACT FROM AUTHOR]

In public-private partnerships (PPPs), escalation of commitment (EOC) of investors often occurs when receiving negative feedback, leading to a great waste of resources and not conducive to the sustainable development of PPPs. The degree of project completion and decision-making responsibilities of investors with different conscientiousness and neuroticism may affect subsequent resource allocation and further influence their escalation behaviour. Thus, through scenario simulation, this paper constructs path analysis to illustrate the formation mechanism of EOC by investors with diverse conscientiousness and neuroticism in different degrees of decision-making responsibilities and project completion, in which confidence in completing the projects may present a mediating effect. The empirical results show that completion degree and decision-making responsibilities both positively affect investors' EOC and that the interaction is significant. The impact mechanism of conscientiousness and neuroticism on EOC varies in different project scenarios. Then, some targeted recommendations are proposed to curb EOC. The findings provide scientific evidence for governments to conduct effective governance of EOC in PPPs. [ABSTRACT FROM AUTHOR]

The entrepreneurial journey is a complex and challenging process, and many entrepreneurs experience venture distress, i.e., they realize that their venture is underperforming based on the threshold they had set for it. While it is generally acknowledged that distressed ventures should be exited, preferably as fast as possible, many entrepreneurs face difficulties in letting go of the venture they are often so committed to. Building on embeddedness and escalation of commitment, this study investigates under which conditions entrepreneurs are more or less likely to persist with their distressed venture. In particular, it assesses the impact of internal and external venture stakeholders on entrepreneurial persistence and the extent to which family factors mitigate these relationships. To do so, the study uses a sample of 231 entrepreneurs in Belgium who called upon help from a support agency for distressed ventures in 2016. We find that persistence is particularly strong for entrepreneurs of ventures with (more) employees and with lower levels of operating debts. As the venture's level of operating debts increases, the probability of persistence decreases for entrepreneurs with no alternative family income and with dependents in the family household. We discuss implications for theory and practice. Plain English Summary Entrepreneurs often persist with a distressed venture, especially when having (more) employees and lower operating debts. Yet, in the presence of increasing operating debts and dependents requiring household income, venture exit becomes more likely. Entrepreneurs' persistence with their distressed ventures thus seems to be driven by their commitment toward venture stakeholders (such as employees and creditors), one the one hand, and their family household, on the other hand. These insights into when and why entrepreneurs in distress are more or less likely to persist enable business advisors and policy makers to better understand and support the needs of these entrepreneurs. In addition, this study advances academic knowledge on a highly prevalent yet understudied phenomenon in entrepreneurship, namely venture distress. [ABSTRACT FROM AUTHOR]

Behavioral science has witnessed an explosion in the number of biases identified by behavioral scientists, to more than 200 at present. This article identifies the 10 most important behavioral biases for project management. First, we argue it is a mistake to equate behavioral bias with cognitive bias, as is common. Cognitive bias is half the story; political bias the other half. Second, we list the top 10 behavioral biases in project management: (1) strategic misrepresentation, (2) optimism bias, (3) uniqueness bias, (4) the planning fallacy, (5) overconfidence bias, (6) hindsight bias, (7) availability bias, (8) the base rate fallacy, (9) anchoring, and (10) escalation of commitment. Each bias is defined, and its impacts on project management are explained, with examples. Third, base rate neglect is identified as a primary reason that projects underperform. This is supported by presentation of the most comprehensive set of base rates that exist in project management scholarship, from 2,062 projects. Finally, recent findings of power law outcomes in project performance are identified as a possible first stage in discovering a general theory of project management, with more fundamental and more scientific explanations of project outcomes than found in conventional theory. [ABSTRACT FROM AUTHOR]

The escalation of commitment process involves a decision-maker continuing commitment to an investment after receiving negative information. This study develops a principal-agent model to explore how escalation decisions are linked with departures of CEOs from the position. With asymmetric information, a CEO has an incentive to conceal prior decision errors by escalating commitment to failing investments and leaving the firm before the outcome of investment decisions is disclosed publicly. Results of empirical analysis based on a sample of over 3,000 US firms are consistent with the theory and demonstrate that firms' reporting of low financial performance relative to their industry as well as initiation of new discontinued operations are preceded, and not followed, by unplanned CEO departures. [ABSTRACT FROM AUTHOR]

The escalation of commitment process involves a decision-maker continuing commitment to an investment after receiving negative information. This study develops a principal-agent model to explore how escalation decisions are linked with departures of CEOs from the position. With asymmetric information, a CEO has an incentive to conceal prior decision errors by escalating commitment to failing investments and leaving the firm before the outcome of investment decisions is disclosed publicly. Results of empirical analysis based on a sample of over 3,000 US firms are consistent with the theory and demonstrate that firms’ reporting of low financial performance relative to their industry as well as initiation of new discontinued operations are preceded, and not followed, by unplanned CEO departures.

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

Several empirical studies have shown that decision makers tend to experience an escalation of commitment bias, namely a tendency to continue investment projects that are less profitable, even though there is information of the less profitable project performance and that other available alternative investment opportunities are more profitable in the future. This study aims to improve the manager's decision making behavior model by considering the ethical environment as one of the factors that influence investment project evaluation decisions. More specifically, this study empirically examines the ethical environment as a strategy to reduce the tendency for escalation of commitment behavior. This study uses a laboratory experimental method with a 2 x 2 factorial experimental design between subject with adverse selection (present/absent) and ethical environment (strong/weak). The research sample consisted of 246 undergraduate and postgraduate students in Accounting and Management who acted as investment project managers. Based on ANOVA analysis results, it shows that managers who experience adverse selection conditions tend to continue unfavorable projects (conduct escalation of commitment). In addition, the results of this study also show that the tendency of managers to end investment projects that are not profitable for managers who are in a condition of a strong ethical environment will be greater when they experience adverse selection conditions compared to when they do not experience it

Escalation of commitment causes people to continue a failing course of action. We study the role of construal level in such escalation of commitment. Consistent with the widely held view of construal level as a primed effect, we employed a commonly used prime for manipulating this construct in a laboratory experiment. Our findings revealed that the prime failed to produce statistically significant differences in construal level, which was measured using the Behavior Identification Form (BIF). Furthermore, there was no effect of the prime on escalation of commitment, or on constructs that have previously been linked to construal level such as the perceived importance of feasibility considerations relative to desirability considerations, and the number of pros and cons that subjects can think of. Interestingly, however, subjects' actual construal level scores on the BIF were found to significantly affect escalation. Specifically, our findings show that people with a low construal level are less willing to continue a failing project. This relation is mediated by the perceived importance of the feasibility of the project relative to its desirability. For people with a low construal level, the perceived importance of feasibility relative to desirability is higher, which in turn makes escalation of commitment less likely. Our findings are consistent with prior research suggesting that priming construal level may not always be effective. Thus, while construal level has typically been regarded as a state-like variable that can be primed, in this study, we show that construal level may also be considered as a trait. [ABSTRACT FROM AUTHOR]

Why do some civil war peace processes stall, while others build momentum? This paper examines how combatant behavior surrounding previous negotiations influences future talks during civil war. We argue disputants learn about the severity of the commitment problem based on whether their opponent escalates or de-escalates violence immediately after negotiations. While de-escalation reveals the opponent is willing and able to negotiate in good faith, escalation reveals the commitment problem to be severe. Post-negotiation escalation is perceived as a sign of bad faith or dissent within the opponent's ranks over the decision to negotiate. We hypothesize, therefore, that escalation after prior negotiations reduces the likelihood of subsequent talks relative to de-escalation. As a consequence, reviving a peace process after post-negotiation escalation may require external pressure to bring the disputants back to the table. We expect third-party involvement to mitigate the negative effect of prior escalation by providing incentives to revive talks or alleviating fears of defection. We test our expectations on monthly data on civil conflicts in Africa, finding post-negotiation escalation decreases the probability of subsequent negotiations, conditioned by third-party involvement. These findings are robust to a variety of operationalization and model specification choices. ¿Por qué algunos procesos de paz de las guerras civiles se detienen, mientras que otros generan impulso? Este ensayo analiza cómo la conducta combatiente que rodea las negociaciones previas influye en las conversaciones futuras durante la guerra civil. Sostenemos que los contendientes aprenden sobre la gravedad del problema de compromiso en función de si su oponente intensifica la violencia o frena su escalada inmediatamente después de las negociaciones. Mientras que frenar la escalada de violencia revela que el oponente está dispuesto a negociar de buena fe, intensificar la violencia pone de manifiesto que el problema de compromiso es grave. La intensificación de la violencia posnegociaciones se percibe como una señal de mala fe o disidencia en los rangos del oponente respecto de la decisión de negociar. Por consiguiente, hipotetizamos que la intensificación de la violencia después de las negociaciones previas reduce la probabilidad de que haya conversaciones posteriores, comparada con la desintensificación. En consecuencia, reactivar un proceso de paz tras la intensificación de la violencia posnegociaciones puede requerir una presión externa de lograr que los contendientes vuelvan a la mesa de negociaciones. Esperamos la participación de terceros para mitigar el efecto negativo de la intensificación previa proporcionando incentivos para retomar las conversaciones o aliviar los temores de defección. Analizamos nuestras expectativas con los datos mensuales sobre conflictos civiles en África y descubrimos que la intensificación de la violencia posnegociaciones disminuye la probabilidad de que haya negociaciones posteriores, condicionadas a la participación de terceros. Estas conclusiones son valederas independientemente de diversas elecciones de puesta en práctica y especificación de modelo. Pourquoi certains processus de pacification de guerres civiles s'immobilisent alors que d'autres s'accélèrent ? Cet article examine la façon dont le comportement des combattants dans les négociations précédentes influence les pourparlers futurs lors d'une guerre civile. Nous soutenons que les participants à la négociation prennent conscience de la gravité du problème d'engagement en se basant sur l'escalade ou la désescalade de la violence de leur adversaire immédiatement après les négociations. Bien que la désescalade de la violence révèle que l'adversaire est désireux et capable de négocier de bonne foi, son escalade révèle que le problème d'engagement est grave. L'escalade post-négociation de la violence est perçue comme un signe de mauvaise foi ou de désaccord par rapport à la décision de négocier dans les rangs de l'adversaire. Nous émettons donc l'hypothèse que contrairement à la désescalade de la violence, son escalade après des négociations réduit la probabilité de pourparlers ultérieurs. Par conséquent, la relance d'un processus de paix après une escalade post-négociation de la violence peut exiger une pression extérieure pour ramener les parties prenantes à la table des négociations. Nous pensons que l'implication d'un tiers atténue l'effet négatif d'une précédente escalade de la violence en fournissant des incitations à relancer les pourparlers ou en réduisant les craintes de défection. Nous avons mis nos points de vue à l'épreuve en nous basant sur des données mensuelles sur les conflits civils en Afrique, et nous avons constaté que l'escalade post-négociation de la violence réduisait la probabilité de négociations ultérieures, qui était alors conditionnée par l'implication d'un tiers. Ces résultats sont robustes face à divers choix d'opérationnalisation et de spécification de modèles. [ABSTRACT FROM AUTHOR]