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Escalation Errors And The Sunk Cost Effect - An Explanation Based On Reputation And Information Asymmetries

Citations

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Cited by:

  1. David Johnstone, 2002. "Behavioral and Prescriptive Explanations of a Reverse Sunk Cost Effect," Theory and Decision, Springer, vol. 53(3), pages 209-242, November.
  2. Cheng, Lei & Sun, Zhen, 2021. "The white elephant in IP management market frictions, market connections and escalation of commitment," China Economic Review, Elsevier, vol. 67(C).
  3. Christensen, Brant & Schmardebeck, Roy & Seidel, Timothy, 2022. "Do auditors’ incentives affect materiality assessments of prior-period misstatements?," Accounting, Organizations and Society, Elsevier, vol. 101(C).
  4. Philipp N. Herrmann & Dennis O. Kundisch & Mohammad S. Rahman, 2015. "Beating Irrationality: Does Delegating to IT Alleviate the Sunk Cost Effect?," Management Science, INFORMS, vol. 61(4), pages 831-850, April.
  5. Rick Harbaugh, 2005. "Prospect Theory or Skill Signaling?," Working Papers 2005-06, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  6. Camerer, Colin F. & Weber, Roberto A., 1999. "The econometrics and behavioral economics of escalation of commitment: a re-examination of Staw and Hoang's NBA data," Journal of Economic Behavior & Organization, Elsevier, vol. 39(1), pages 59-82, May.
  7. Matthias Mahlendorf, 2015. "Allowance for failure: reducing dysfunctional behavior by innovating accountability practices," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 19(3), pages 655-686, August.
  8. Cheng-Li Huang & Bao-Guang Chang, 2010. "The Effects of Managers’ Moral Philosophy on Project Decision Under Agency Problem Conditions," Journal of Business Ethics, Springer, vol. 94(4), pages 595-611, July.
  9. Martens, Nikolai & Orzen, Henrik, 2021. "Escalating commitment to a failing course of action — A re-examination," European Economic Review, Elsevier, vol. 137(C).
  10. Mukesh Eswaran & Hugh M. Neary, 2016. "The Evolutionary Logic Of Honoring Sunk Costs," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 835-846, April.
  11. David Hirshleifer & Ivo Welch, 2002. "An Economic Approach to the Psychology of Change: Amnesia, Inertia, and Impulsiveness," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 379-421, September.
  12. Berg, Joyce E. & Dickhaut, John W. & Kanodia, Chandra, 2009. "The role of information asymmetry in escalation phenomena: Empirical evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 69(2), pages 135-147, February.
  13. Yihui Pan & Tracy Yue Wang & Michael S. Weisbach, 2015. "Learning About CEO Ability and Stock Return Volatility," The Review of Financial Studies, Society for Financial Studies, vol. 28(6), pages 1623-1666.
  14. Stefano Ugolini, 2021. "The coevolution of banks and corporate securities markets: The financing of Belgium’s industrial take-off in the 1830s," Business History, Taylor & Francis Journals, vol. 63(6), pages 892-913, August.
  15. Otto H. Swank & Bauke Visser, 2015. "Learning from Others? Decision Rights, Strategic Communication, and Reputational Concerns," American Economic Journal: Microeconomics, American Economic Association, vol. 7(4), pages 109-149, November.
  16. Gatzer, Sebastian & Hoang, Daniel & Ruckes, Martin, 2015. "Internal Capital Markets and Diversified Firms: Theory and Practice," EconStor Preprints 169432, ZBW - Leibniz Information Centre for Economics.
  17. Hendrik Hakenes & Friederike Schlegel, 2014. "I Spy with my Little Eye... a Banking Crisis - Early Warnings and Incentive Schemes in Banks," CESifo Working Paper Series 5140, CESifo.
  18. Roodhooft, Filip & Warlop, Luk, 1999. "On the role of sunk costs and asset specificity in outsourcing decisions: a research note," Accounting, Organizations and Society, Elsevier, vol. 24(4), pages 363-369, May.
  19. Chen, Aihui & Lu, Yaobin & Wang, Bin & Zhao, Ling & Li, Ming, 2013. "What drives content creation behavior on SNSs? A commitment perspective," Journal of Business Research, Elsevier, vol. 66(12), pages 2529-2535.
  20. Ulfert Gronewold & Anna Gold & Steven Salterio, 2013. "Reporting Self-Made Errors: The Impact of Organizational Error-Management Climate and Error Type," Journal of Business Ethics, Springer, vol. 117(1), pages 189-208, September.
  21. Guillermo Caruana & Marco Celentani, 2002. "Career Concerns and Contingent Compensation," Working Papers wp2002_0205, CEMFI.
  22. Fuhai HONG & Xiaojian ZHAO, 2014. "Sunk Cost as a Self-Disciplining Device," Economic Growth Centre Working Paper Series 1503, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
  23. Isabel-María García-Sánchez & Emma García-Meca, 2020. "Do Able Bank Managers Exhibit Specific Attributes? An Empirical Analysis of Their Investment Efficiency," Administrative Sciences, MDPI, vol. 10(3), pages 1-17, July.
  24. R. Preston Mcafee & Hugo M. Mialon & Sue H. Mialon, 2010. "Do Sunk Costs Matter?," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 323-336, April.
  25. Volker Laux, 2017. "Supporting and Assessing Agents," Journal of Accounting Research, Wiley Blackwell, vol. 55(4), pages 995-1016, September.
  26. Duxbury, Darren, 2012. "Sunk costs and sunk benefits: A re-examination of re-investment decisions," The British Accounting Review, Elsevier, vol. 44(3), pages 144-156.
  27. Yihui Pan & Tracy Yue Wang & Michael S. Weisbach, 2016. "CEO Investment Cycles," The Review of Financial Studies, Society for Financial Studies, vol. 29(11), pages 2955-2999.
  28. Teck-Hua Ho & I. P. L. Png & Sadat Reza, 2018. "Sunk Cost Fallacy in Driving the World’s Costliest Cars," Management Science, INFORMS, vol. 64(4), pages 1761-1778, April.
  29. Boyson, Nicole M., 2010. "Implicit incentives and reputational herding by hedge fund managers," Journal of Empirical Finance, Elsevier, vol. 17(3), pages 283-299, June.
  30. Kathryn Kadous & Lisa M. Sedor, 2004. "The Efficacy of Third†Party Consultation in Preventing Managerial Escalation of Commitment: The Role of Mental Representations," Contemporary Accounting Research, John Wiley & Sons, vol. 21(1), pages 55-82, March.
  31. Parayre, Roch, 1995. "The strategic implications of sunk costs: A behavioral perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 28(3), pages 417-442, December.
  32. Bao, Xing & Mirchandani, Prakash & Shang, Jennifer & Narayan, Ramasubbu, 2023. "Playing politics or playing right: Impacts of reputation-seeking on short-term disruptions management," Omega, Elsevier, vol. 116(C).
  33. RAMJI BALAKRISHNAN & DOUGLAS V. DeJONG, 1993. "The Role of Cost Allocations in the Acquisition and Use of Common Resources," Contemporary Accounting Research, John Wiley & Sons, vol. 9(2), pages 395-414, March.
  34. Brett Trueman, 1990. "On the incentives for security analysts to revise their earnings forecasts," Contemporary Accounting Research, John Wiley & Sons, vol. 7(1), pages 203-222, September.
  35. Caruana, Guillermo, 2001. "Career concerns and contingent compensation," UC3M Working papers. Economics we014811, Universidad Carlos III de Madrid. Departamento de Economía.
  36. Daniel Friedman & Kai Pommerenke & Rajan Lukose & Garrett Milam & Bernardo Huberman, 2007. "Searching for the sunk cost fallacy," Experimental Economics, Springer;Economic Science Association, vol. 10(1), pages 79-104, March.
  37. Stanley Baiman & Mirko S. Heinle & Richard Saouma, 2013. "Multistage Capital Budgeting with Delayed Consumption of Slack," Management Science, INFORMS, vol. 59(4), pages 869-881, April.
  38. Soon‐Yeow Phang, 2020. "Impacts of the timing of the discovery of a subsequent event on the auditors’ approach to subsequent events," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 4121-4146, December.
  39. Tomoya Tajika, 2021. "Persistent and snap decision‐making," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 203-227, February.
  40. Ethan A. Meyers & Michał Białek & Jonathan A. Fugelsang & Derek J. Koehler & Ori Friedman, 2019. "Wronging past rights: The sunk cost bias distorts moral judgment," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(6), pages 721-727, November.
  41. Jian, Ming & Lee, Kin Wai, 2011. "Does CEO reputation matter for capital investments?," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 929-946, September.
  42. 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.
  43. Chi, T. & Nystrom, P. C., 1995. "Decision dilemmas facing managers: recognizing the value of learning while making sequential decisions," Omega, Elsevier, vol. 23(3), pages 303-312, June.
  44. Marco Celentani & Rosa Loveira-Pazó, 2004. "What form of relative performance evaluation?," Economics Working Papers 744, Department of Economics and Business, Universitat Pompeu Fabra.
  45. Cheng-Li Huang & Ju-Lan Tsai, 2015. "Managerial Morality and Philanthropic Decision-Making: A Test of an Agency Model," Journal of Business Ethics, Springer, vol. 132(4), pages 795-811, December.
  46. Weisbach, Michael S., 1995. "CEO turnover and the firm's investment decisions," Journal of Financial Economics, Elsevier, vol. 37(2), pages 159-188, February.
  47. Peter Gordon Roetzel & Burkhard Pedell & Daniel Groninger, 2020. "Information load in escalation situations: combustive agent or counteractive measure?," Journal of Business Economics, Springer, vol. 90(5), pages 757-786, June.
  48. Francis, Jere R. & Martin, Xiumin, 2010. "Acquisition profitability and timely loss recognition," Journal of Accounting and Economics, Elsevier, vol. 49(1-2), pages 161-178, February.
  49. Tan, Hun-Tong & Yates, J. Frank, 2002. "Financial Budgets and Escalation Effects," Organizational Behavior and Human Decision Processes, Elsevier, vol. 87(2), pages 300-322, March.
  50. Booth, Peter & Schulz, Axel K. -D., 2004. "The impact of an ethical environment on managers' project evaluation judgments under agency problem conditions," Accounting, Organizations and Society, Elsevier, vol. 29(5-6), pages 473-488.
  51. Salter, Stephen B. & Sharp, David J. & Chen, Yasheng, 2013. "The moderating effects of national culture on escalation of commitment," Advances in accounting, Elsevier, vol. 29(1), pages 161-169.
  52. Tamada, Yasunari & Tsai, Tsung-Sheng, 2014. "Delegating the decision-making authority to terminate a sequential project," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 178-194.
  53. Patricia M. S. Tan, 2000. "Project Termination Decisions, Underinvestment and Overinvestment," Contemporary Accounting Research, John Wiley & Sons, vol. 17(1), pages 135-170, March.
  54. Salter, Stephen B. & Sharp, David J., 2001. "Agency effects and escalation of commitment: do small national culture differences matter?," The International Journal of Accounting, Elsevier, vol. 36(1), pages 33-45, February.
  55. Nwaeze, Emeka T., 2005. "Replacement versus adaptation investments and equity value," Journal of Corporate Finance, Elsevier, vol. 11(3), pages 523-549, June.
  56. Carlos Corona & Ramandeep S. Randhawa, 2010. "The Auditor's Slippery Slope: An Analysis of Reputational Incentives," Management Science, INFORMS, vol. 56(6), pages 924-937, June.
  57. Guedes, Jose & Parayre, Roch, 1997. "Managerial reputation and divisional sell-offs: A model and empirical test," Journal of Banking & Finance, Elsevier, vol. 21(8), pages 1085-1106, August.
  58. repec:dgr:rugsom:07003 is not listed on IDEAS
  59. Dirk Sliwka, 2007. "Managerial Turnover and Strategic Change," Management Science, INFORMS, vol. 53(11), pages 1675-1687, November.
  60. Stephen C. Hansen & Robert P. Magee, 1993. "Capacity Cost and Capacity Allocation," Contemporary Accounting Research, John Wiley & Sons, vol. 9(2), pages 635-660, March.
  61. Esposito De Falco Salvatore & Renzi Antonio, 2015. "The Role of Sunk Cost and Slack Resources in Innovation: A Conceptual Reading in an Entrepreneurial Perspective," Entrepreneurship Research Journal, De Gruyter, vol. 5(3), pages 167-179, July.
  62. W. Robert Knechel & Justin Leiby, 2016. "If You Want My Advice: Status Motives and Audit Consultations About Accounting Estimates," Journal of Accounting Research, Wiley Blackwell, vol. 54(5), pages 1331-1364, December.
  63. Daniel Ferreira & Marcelo Rezende, 2007. "Corporate strategy and information disclosure," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 164-184, March.
  64. Haan, Marco A. & Los, Bart & Riyanto, Yohanes E., 2007. "Harmful monitoring," Research Report 07003, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  65. Borland, Jeff & Lee, Leng & Macdonald, Robert D., 2011. "Escalation effects and the player draft in the AFL," Labour Economics, Elsevier, vol. 18(3), pages 371-380, June.
  66. Choi, Jay Pil & Kristiansen, Eirik Gaard & Nahm, Jae, 2017. "Communication of soft information: Reputation and imperfect enforcement of reporting quality," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 91-106.
  67. Marietta Peytcheva & Peter R. Gillett, 2012. "Auditor perceptions of prior involvement and reputation threats as antecedents of quality threatening audit behavior," Managerial Auditing Journal, Emerald Group Publishing, vol. 27(9), pages 796-820, October.
  68. Prendergast, Canice & Stole, Lars, 1996. "Impetuous Youngsters and Jaded Old-Timers: Acquiring a Reputation for Learning," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1105-1134, December.
  69. Hoang, Daniel & Gatzer, Sebastian & Ruckes, Martin E., 2018. "The economics of capital allocation in firms: Evidence from internal capital markets," Working Paper Series in Economics 115, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
  70. Grund, Christian & Höcker, Jan & Zimmermann, Stefan, 2010. "Risk Taking Behavior in Tournaments: Evidence from the NBA," IZA Discussion Papers 4812, Institute of Labor Economics (IZA).
  71. Ronald A. Dye & S. Sridhar, 2002. "Resource Allocation Effects of Price Reactions to Disclosures," Contemporary Accounting Research, John Wiley & Sons, vol. 19(3), pages 385-410, September.
  72. Nicole L. Cade & Lisa Koonce & Kim I. Mendoza, 2020. "Using video to disclose forward-looking information: the effect of nonverbal cues on investors’ judgments," Review of Accounting Studies, Springer, vol. 25(4), pages 1444-1474, December.
  73. repec:cup:judgdm:v:14:y:2019:i:6:p:721-727 is not listed on IDEAS
  74. Rutledge, Robert W. & Karim, Khondkar E., 1999. "The influence of self-interest and ethical considerations on managers' evaluation judgments," Accounting, Organizations and Society, Elsevier, vol. 24(2), pages 173-184, April.
  75. Young K. Kwon, 2005. "Accounting Conservatism and Managerial Incentives," Management Science, INFORMS, vol. 51(11), pages 1626-1632, November.
  76. W. Bruce Johnson & S. Mark Young & Michael Welker, 1993. "Managerial Reputation and the Informativeness of Accounting and Market Measures of Performance," Contemporary Accounting Research, John Wiley & Sons, vol. 10(1), pages 305-332, September.
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