The downside of persistence: The effects of mood on an escalation of commitment paradigm

Abstract

Escalation of commitment is a decision-making phenomenon that continues to impact the performance of managers. This continuation of investments into a losing course of action has been documented in a variety of settings (e.g., performance appraisals; Bazerman, Beekun, & Schoorman, 1982; Schoorman, 1988; Slaughter & Greguras, 2008). This study contributes to the literature on escalation of commitment by analyzing the specific effects of mood (positive, negative, and neutral) on the occurrence of escalation. To date, the literature lacks a complete investigation of the effects of mood on escalation of commitment (see Wong, Yik, & Kwong, 2006 for an exception). The Affect as Information model (AAI) proposed by Schwarz and Clore (1983) indicates that individuals in a positive mood tend to apply more heuristic information processing, whereas those in a negative mood tend to use a more deliberate approach. Given these tendencies, the current study hypothesized that negative moods will lead to less escalation of commitment, and positive mood to more escalation of commitment. Further, a research question explored the impact of escalation condition on the total escalation of participants. Four hundred and thirty five undergraduate participants completed a mood induction study and a “separate” escalation of commitment decision task. Results indicated an interaction between mood and escalation conditions, and a main effect for escalation condition. No significant main effect was found for mood. Implications for escalation of commitment research and affective differences in decision making are discussed.