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Escalation bias: does it extend to marketing?

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  • Armstrong, J. Scott
  • Coviello, Nicole
  • Safranek, Barbara

Abstract

Escalation bias implies that managers favor reinvestments in projects that are doing poorly over those doing well. We tested this implication in a marketing context by conducting experiments on advertising and product-design decisions. Each situation was varied to reflect either a long-term or a short-term decision. Besides these four conditions, we conducted three replications. We found little evidence of escalation bias by 365 subjects in the seven experimental comparisons.

Suggested Citation

  • Armstrong, J. Scott & Coviello, Nicole & Safranek, Barbara, 1993. "Escalation bias: does it extend to marketing?," MPRA Paper 81685, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:81685
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    References listed on IDEAS

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    Cited by:

    1. Alejandro Montecinos‐Pearce & Pablo Rodrigo & Ignacio J. Duran, 2020. "When is escalation of commitment unstoppable in group settings? An iterative economic modeling approach to unveil the dark side of group decision‐making," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1387-1402, December.
    2. Fattal, Deborah R. & Ben-Shaul, Avinoam, 1995. "Lipid chain packing and lipid-protein interaction in membranes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 220(1), pages 192-216.
    3. Bragger, Jennifer DeNicolis & Bragger, Donald & Hantula, Donald A. & Kirnan, Jean, 1998. "Hyteresis and Uncertainty: The Effect of Uncertainty on Delays to Exit Decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(3), pages 229-253, June.
    4. Białek Michał & Węgrzyn Michał & Meyers Ethan A., 2021. "Escalation of commitment is independent of numeracy and cognitive reflection. Failed replication and extension of Staw (1976)," Economics and Business Review, Sciendo, vol. 7(2), pages 5-16, June.
    5. Robert Mayberry & James Sanders Boles & Naveen Donthu, 2018. "An escalation of commitment perspective on allocation-of-effort decisions in professional selling," Journal of the Academy of Marketing Science, Springer, vol. 46(5), pages 879-894, September.

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    More about this item

    Keywords

    escalation bias; marketing;

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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