Escalation of Commitment


In military circles we can pretty much describe this with one word: Vietnam.  Escalation of commitment is the tendency for people to continue to support previously unsuccessful endeavors.  All human beings have numerous decisions to make and inevitably some will have bad outcomes.  The logical thing to do in these instances is to change that decision or try to reverse it.  Sometimes, however, people feel compelled not only to stick with their decision, but also to further invest in that decision because they have already made such a large expenditure.

Suppose I have invested most of my life savings in homeopathic snake oil, but it turns out that no one wants to buy it.  After a couple months it is obvious that my business is going to fail.  The logical thing to do would be to cut my losses and drop the business.  However, because man is not a logical creature and because I have so much of my savings involved, I feel committed to the business and invest even more money into the endeavor hoping that the additional cash will turn the business around. This is also what is known in my family as “throwing good money after bad”.


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