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Nonrational Escalation of Commitment Decisions

You and your co-workers had an in-depth discussion about nonrational escalation of commitment. Use your best communication techniques to discuss the following questions:

1. Identify the possible original decisions, the person(s) who could make it, and the person(s) who may escalate the commitment to that decision.
2. Describe the circumstances that led to the commitment being escalated.
3. Where do you think the nonrational escalation of commitment may occur?
4. Explain why the escalation is nonrational.
5. Discuss the impact of this escalation of commitment.
6. Document any assumptions you made, and use the APA Guide, 5th edition for citation purposes.

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Please see the response attached, which is also presented below. I hope this helps and take care.

You and your co-workers had an in-depth discussion about non-rational escalation of commitment. Use your best communication techniques to discuss the following questions:

1. Identify the possible original decisions, the person(s) who could make it, and the person(s) who may escalate the commitment to that decision.

This question is asking you to brainstorm (as a group) possible situations of decision, who could make them and the persons who may escalate the commitment to that decision.

Escalation of commitment is the phenomenon where people increase their investment in a decision despite new evidence suggesting that the decision was probably wrong. Such investment may include money (known informally as "throwing good money after bad"), time, or - in the case of military strategy - human lives. The term is also used to describe poor decision-making in business, government, information systems in general, software project management in particular, politics, and gambling.

Escalation of commitment was recognized by Barry M. Staw in his 1976 paper, "Knee deep in the big muddy: A study of escalating commitment to a chosen course of action".

a. Describe the circumstances that led to the commitment being escalated.

Examples are frequently seen when parties engage in a bidding war; the bidders can end up paying much more than the object is worth to justify the initial expenses associated with bidding (such as research), as well as as part of a competitive instinct. (1)

For example, after a heated and aggressive bidding war Robert Campeau ended up buying Bloomingdale's department store for an estimated 600 million dollars more than it was worth. The Wall Street Journal noted that "we're not dealing in price anymore but egos". Campeau was forced to declare bankruptcy soon afterwards.[1]

In addition, often when two competing brands are attempting to increase market share, they end up spending money without either increasing market share in a significant manner. Though the most commonly cited examples of ...

Solution Summary

This solution identifies the possible original decisions, the person(s) who could make it, and the person(s) who may escalate the commitment to that decision. Specifically, it describes the circumstances that led to the commitment being escalated and where the nonrational escalation of commitment may occur. It also explains why the escalation is nonrational and then discusses the impact of this escalation of commitment. 1335 words with 4 references.

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