Given the principles of escalating commitment, in which situation described below would you give the greatest funding to the same program in 2010?
A) After you funded the program in 2008, it turned out to be very profitable.
B) After another manager funded the program in 2008, it turned out to be very profitable.
C) After you funded the program in 2008, it turned out to be a "loser," showing actual prospects of failing.
D) After another manager funded the program in 2008, it turned out to be a "loser," showing actual prospects of failing.

Question

Quizplus · Accepted Answer

The principle of escalating commitment suggests that previous investment should not be a significant influence on current investment decisions. Therefore, options A and B should not be factors in the decision-making process for 2010. Option D may be tempting to invest more to rescue a failing project, but this behavior perpetuates sunk cost fallacy. Option C provides an opportunity to reevaluate the program and adjust it accordingly to make it successful in the future. Thus, funding the failing program more in 2010 is the best choice.

Given the Principles of Escalating Commitment, in Which Situation Described