Commitment bias describes the tendency of an individual to remain committed to past behaviors – even if they result in undesirable outcomes. The bias is particularly pronounced when such behaviors are performed publicly. Commitment bias is also known as escalation of commitment.
Aspect | Explanation |
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Definition | Commitment Bias, also known as Escalation of Commitment or Sunk Cost Fallacy, is a cognitive bias that occurs when individuals continue investing time, effort, or resources into a decision, project, or course of action despite evidence that it’s not delivering the expected results. This bias arises from a desire to justify past decisions and avoid admitting that previous investments were misguided or wasted. It can lead to suboptimal outcomes as individuals persist in unproductive or failing endeavors, driven by their initial commitment rather than objective evaluation. Understanding Commitment Bias is vital for making rational decisions and avoiding the trap of escalating commitment to a losing proposition. |
Key Concepts | – Sunk Costs: The central concept is the consideration of costs already incurred, which should not influence future decisions. – Escalation: The bias involves an escalation of commitment to a failing course of action. – Justification: People seek to justify past decisions by persisting in them. – Optimism Bias: Optimistic beliefs about the future success of the project contribute to this bias. – Avoiding Regret: Individuals often fear regretting the abandonment of an endeavor. |
Characteristics | – Continued Investment: Commitment Bias is characterized by continued investment in a failing project or decision. – Ignoring New Information: Individuals may ignore or downplay new information that contradicts their initial commitment. – Emotional Attachment: Emotional attachment to the initial decision plays a significant role. – Optimistic Outlook: Optimism about the future success of the endeavor is a common trait. – Avoiding Regret: People may persist to avoid regretting the abandonment of the project. |
Implications | – Suboptimal Outcomes: Commitment Bias can lead to suboptimal results due to the persistence in failing endeavors. – Resource Wastage: Continued investment in a failing project can waste resources. – Loss of Objectivity: The bias hinders objective decision-making by focusing on past commitments. – Escalation of Conflict: In interpersonal relationships or disputes, it can escalate conflicts unnecessarily. – Negative Psychological Impact: Persisting in failing decisions can lead to stress and anxiety. |
Advantages | – Persistence: Commitment Bias can foster persistence and determination in the face of challenges. – Learning Opportunities: It can provide opportunities to learn from mistakes and failures. – Goal Achievement: In some cases, persistence can lead to eventual success. – Sticking to Values: Commitment to values and principles can be a positive aspect. – Motivation: It can serve as a motivating factor to overcome obstacles. |
Drawbacks | – Suboptimal Outcomes: The primary drawback is the tendency to persist in failing endeavors. – Resource Wastage: Valuable resources can be wasted on futile projects. – Stress and Anxiety: Continuously investing in failing endeavors can lead to stress and anxiety. – Negative Impact on Others: Escalation of commitment can negatively affect others involved in the project. – Loss of Objectivity: Objectivity is compromised when past commitments dominate decision-making. |
Applications | – Business and Investments: Commitment Bias can affect business decisions, project management, and investment strategies. – Personal Relationships: It can impact personal relationships when individuals persist in toxic or unfulfilling relationships. – Sports and Athletics: Athletes may push through injuries due to commitment bias. – Career Decisions: It can influence career choices and job persistence. – Politics: In politics, individuals may continue to support a party or candidate despite evidence of poor performance. |
Use Cases | – Business Project: A company continues funding a failing project because of the resources already invested, despite evidence of its unviability. – Personal Relationship: An individual remains in a toxic relationship, justifying it based on the time and emotions already invested. – Athlete’s Decision: An athlete ignores an injury and continues to compete in a tournament, fearing the sunk cost of training and preparation. – Career Path: A person persists in a career they dislike because of the years they have spent pursuing it. – Political Support: A voter continues to support a political party even when it no longer aligns with their values, citing past allegiance. |
Understanding commitment bias
In business, this may be exemplified by the continued investment of time or money into a project that is clearly going to fail.
Indeed, the failure of the project is often painfully obvious to outsiders and they see any attempt to save it as fruitless.
Commitment bias argues that the number of resources invested in a failing project is proportional to how much time, money, or energy has already been spent.
This somewhat irrational behavior is caused by an inability to accept or acknowledge failure.
But what causes commitment bias? There are several theories:
A desire for people to be judged positively by others
Many want to avoid being judged by others as an incompetent individual who makes poor choices.
This is also known as saving face.
Sunk-cost fallacy
When giving up on a project is seen as a waste of already invested resources, some individuals try to revive a failing project to see a return on investment.
In other words, the legitimacy or potential of the project itself is ignored.
Perceptions and emotional attachment
Those closest to a project – commonly those with the most invested – are sometimes so close that they develop tunnel vision.
A perceived emotional connection to a project causes them to devalue alternative projects or courses of action.
Common examples of commitment bias
Although commitment bias is traditionally associated with failing projects, it can also be seen in scenarios such as:
Poor investment decisions
Investors may continue to hold a depreciating stock if the capital invested makes up a large percentage of their portfolio.
Worse still, they may continue to invest in the stock in a vain attempt to justify their original decision.
Remaining in an unsuitable job
An employee occupying a role they dislike is less likely to resign if the job was hard to land.
They may also view resignation as a waste of a degree or other skills and experience.
Bidding wars
Businesses can become irrational and spend vast amounts of money at auction for the simple reason of not wanting their bidding effort to go to waste.
After a 10-week bidding war to acquire the parent company of department store Bloomingdale’s, Robert Campeau became victor after a bid of $6.58 billion.
But driven by irrational behavior and a win-at-all-costs mentality, the grossly excessive bid caused Campeau to declare bankruptcy soon after.
Key takeaways
- Commitment bias is a tendency for individuals or businesses to remain committed to past behavior, particularly if that behavior is displayed publicly.
- The degree of commitment bias is proportional to the amount of time, energy, or money invested. It is caused by the need the feel validated by others and the sunk-cost fallacy. Emotional attachment to project outcomes is also a major contributing factor.
- Commitment bias causes poor investment decisions and results in employees remaining in unsatisfactory positions. The irrational behavior that exemplifies commitment has also been seen in takeover bidding wars.
Commitment Bias Highlights:
- Definition of Commitment Bias: Commitment bias, also known as escalation of commitment, refers to the tendency for individuals or organizations to persist in their commitment to past actions, even when those actions result in negative outcomes.
- Observable in Failing Projects: Commitment bias is often evident in scenarios where resources like time, money, or effort have been invested in a failing project. Instead of recognizing the failure and cutting losses, individuals may continue investing in hopes of turning things around.
- Factors Behind Commitment Bias:
- Desire for Positive Judgment: People often want to be seen as competent decision-makers and may avoid admitting mistakes to save face.
- Sunk-Cost Fallacy: Individuals may continue with a failing endeavor due to the sunk-cost fallacy, which leads them to consider the resources already invested and not the project’s potential.
- Perceptions and Emotional Attachment: Emotional attachment to a project, combined with tunnel vision, can lead to a disregard for alternatives.
- Examples of Commitment Bias:
- Poor Investment Decisions: Investors may hold onto depreciating assets due to the fear of losing out on their initial investment.
- Remaining in Unsuitable Jobs: Employees might stay in jobs they dislike because of the effort it took to secure the position and a reluctance to waste their skills.
- Bidding Wars: Businesses can engage in irrational bidding wars to avoid the feeling that their bidding efforts were in vain, leading to excessive spending.
Related Framework | Description | When to Apply |
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Commitment Bias | Commitment Bias, also known as escalation of commitment or sunk cost fallacy, refers to the tendency for individuals to continue investing time, money, or effort into a decision or course of action, even when evidence suggests it may be failing. This bias arises from a desire to justify past investments and avoid feelings of regret or failure. Understanding commitment bias can help individuals recognize when they are overly attached to a failing course of action and encourage them to reassess their decisions objectively, considering present circumstances rather than past investments. | When evaluating project viability or assessing decision outcomes, addressing Commitment Bias can improve decision quality and mitigate losses by encouraging objective evaluation and considering present circumstances, thus avoiding escalation of commitment and minimizing sunk costs in project management, investment decisions, or organizational change initiatives, ultimately enhancing resource allocation and fostering adaptive decision-making through rational evaluation and risk-aware strategies. |
Sunk Cost Fallacy | The Sunk Cost Fallacy is a cognitive bias where individuals continue to invest in a failing endeavor because of the resources (time, money, effort) already invested, despite new evidence suggesting it will not succeed. People fall into this trap because they perceive the past investments as irretrievable, leading them to make decisions based on past costs rather than future benefits. Understanding the sunk cost fallacy can help individuals and organizations avoid making irrational decisions by recognizing that past investments should not influence future choices. | When assessing project feasibility or making strategic decisions, addressing the Sunk Cost Fallacy can improve decision quality and reduce losses by focusing on future prospects and potential outcomes, thus avoiding undue influence from past investments and minimizing the impact of sunk costs in resource allocation, investment strategies, or organizational planning, ultimately enhancing resource efficiency and promoting strategic agility through evidence-based decision-making and forward-looking analysis. |
Escalation of Commitment | Escalation of Commitment refers to the tendency for individuals or groups to persist with a failing course of action even when it becomes increasingly clear that it is not working. This phenomenon often occurs due to a desire to justify past decisions, avoid admitting failure, or uphold personal or organizational reputations. Understanding escalation of commitment can help individuals recognize when they are trapped in this cycle and prompt them to reassess their decisions objectively, considering alternative courses of action and potential exit strategies. | When managing project teams or evaluating organizational strategies, addressing Escalation of Commitment can improve decision-making and minimize losses by encouraging open dialogue and considering alternative options, thus preventing prolonged investment in failing endeavors and promoting adaptive responses in project management, organizational leadership, or crisis management, ultimately enhancing organizational resilience and fostering a culture of learning through constructive feedback and flexible decision processes. |
Rational Choice Theory | Rational Choice Theory posits that individuals make decisions by weighing the costs and benefits of available options and selecting the one that maximizes their utility or satisfaction. According to this theory, people are rational actors who seek to make optimal choices given the information and resources available to them. Rational Choice Theory assumes that individuals are not influenced by past investments or sunk costs but rather focus on future outcomes when making decisions. Understanding Rational Choice Theory can help individuals recognize when their decisions deviate from rational principles and strive to make choices that align with their long-term goals and objectives. | When analyzing decision processes or evaluating rationality, applying Rational Choice Theory can improve decision quality and optimize outcomes by considering utility and weighing costs and benefits, thus minimizing irrational biases and promoting rational decision-making in economic analysis, policy formulation, or individual choices, ultimately enhancing efficiency and maximizing utility through evidence-based decision processes and rational evaluation. |
Loss Aversion | Loss Aversion is a cognitive bias where individuals place greater emphasis on avoiding losses than on acquiring equivalent gains. It leads people to prefer avoiding losses, even at the expense of potential gains, resulting in risk-averse behavior. Loss aversion can influence decision-making in various contexts, from financial investments to personal choices. Understanding loss aversion can help individuals recognize when their decisions are influenced by fear of loss and encourage them to weigh risks and rewards more objectively. | When assessing risk tolerance or evaluating decision outcomes, addressing Loss Aversion can improve risk management and enhance decision quality by recognizing biases and weighing risks objectively, thus minimizing aversion to loss and optimizing outcomes in investment strategies, project management, or personal finance, ultimately maximizing returns and fostering risk-aware decision-making through evidence-based analysis and balanced risk assessment. |
Decision Fatigue | Decision Fatigue refers to the deteriorating quality of decisions made by an individual after a long session of decision-making. As individuals make more decisions throughout the day, their cognitive resources become depleted, leading to poorer decision quality, impulsivity, and avoidance of decisions altogether. Understanding decision fatigue can help individuals and organizations implement strategies to mitigate its effects, such as prioritizing important decisions, taking breaks, and simplifying choices. | When managing workload or designing decision processes, addressing Decision Fatigue can improve decision quality and optimize cognitive resources by scheduling important decisions strategically and implementing decision support systems, thus minimizing fatigue-related errors and enhancing productivity in workplace environments, project management, or consumer behavior research, ultimately maximizing cognitive efficiency and promoting well-informed decision-making through strategic planning and resource allocation. |
Anchoring Bias | Anchoring Bias is a cognitive bias where individuals rely too heavily on the first piece of information they encounter (the “anchor”) when making decisions. Subsequent judgments are often biased in favor of the initial anchor, even if it is irrelevant or arbitrary. Anchoring bias can lead to errors in judgment, as individuals may fail to adjust their assessments sufficiently away from the initial anchor. Understanding anchoring bias can help individuals recognize when they are being influenced by irrelevant information and encourage them to seek out additional sources of data or perspectives to inform their decisions more effectively. | When analyzing negotiation strategies or evaluating decision processes, addressing Anchoring Bias can improve decision quality and minimize errors by seeking diverse perspectives and revisiting initial assumptions, thus mitigating bias and enhancing negotiation outcomes in business negotiations, financial planning, or strategic decision-making, ultimately maximizing value and promoting rational judgment through evidence-based analysis and critical thinking. |
Confirmation Bias | Confirmation Bias is a cognitive bias where individuals tend to seek out information that confirms their existing beliefs or hypotheses while ignoring or dismissing contradictory evidence. It can lead to selective perception, biased interpretation of evidence, and overconfidence in one’s opinions. Confirmation bias can distort decision-making processes and hinder objective analysis. Understanding confirmation bias can help individuals guard against its effects by actively seeking out diverse perspectives, challenging assumptions, and critically evaluating information sources. | When conducting research or evaluating information, addressing Confirmation Bias can improve decision quality and minimize errors by seeking diverse sources and challenging assumptions, thus mitigating bias and enhancing analytical rigor in data analysis, scientific research, or strategic planning, ultimately promoting evidence-based decision-making and fostering critical thinking through rigorous inquiry and open-minded inquiry. |
Connected Thinking Frameworks
Convergent vs. Divergent Thinking
Law of Unintended Consequences
Read Next: Biases, Bounded Rationality, Mandela Effect, Dunning-Kruger Effect, Lindy Effect, Crowding Out Effect, Bandwagon Effect.
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