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DO REAL OPTIONS LEAD TO ESCALATION OF COMMITMENT?
- Source :
- Academy of Management Review; Jan2004, Vol. 29 Issue 1, p111-119, 9p
- Publication Year :
- 2004
-
Abstract
- I examine the concern that unconstrained real options can lead to escalation of commitment and identify contexts in which escalation of commitment is likely. I argue that these situations fall primarily outside the realm of unregulated for-profit organizations and also that the predictions of agency and attribution theories counter the predictions of the escalation of commitment framework. Finally, I assert that optimality requires flexibility in the timing of the exercise of real options when returns on investment are volatile. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 03637425
- Volume :
- 29
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- Academy of Management Review
- Publication Type :
- Academic Journal
- Accession number :
- 11851733
- Full Text :
- https://doi.org/10.5465/AMR.2004.11851733