Escalation of Commitment

Hi,

This week’s email is about a common mistake that people make when they encounter setbacks, and how to avoid it.

The information here is mainly from this research article (open-access).

Here are the key practical points you should know:

• People often escalate their initial commitment to things like investments or relationships upon realizing that those things are going poorly, even when this added commitment is a bad idea.

• Examples of this are an entrepreneur who pours more money into a failing company that they should close, and a person who moves in with a toxic partner that they should leave.

• A key reason for this behavior is that when people worry about negative outcomes they generally want to feel like they’re taking action to address it.

• To encourage people to exit problematic engagements, like poor investments or toxic relationships, you can frame this de-escalation of commitment as a form of action, rather than inaction.

• You can also frame escalation of commitment as a more passive approach that maintains the status quo, in contrast to the more active decision to exit the initial commitment.

This can be useful for understanding, predicting, and improving people’s behavior, including your own.

As always, I'm happy to hear your thoughts.

Have a great week,
Itamar