Escalation of Commitment

The more a person invests (money, time, energy, etc.), the less likely that person is to let it go, even when there’s mounting evidence that it’s a bad idea.

Escalation of commitment is responsible for a whole host of issues: businesses and government pouring money into failing projects, people remaining in relationships…both romantic and non-romantic…even though the evidence is clear that said relationships are toxic, and so on.

Ultimately, the individual has an internal drive to prove that he or she was “right all along.” The side effect is continued depletion of resources for a commitment that is not beneficial, and might be downright harmful.

Consider Jane. She feels great status as Vice President of a teddy bear manufacturer. She had a dream one night about a new type of teddy bear and decided it should be a top priority of the company to produce it. After making 100,000 of the scary-looking dream bears, distributors were having a hard time convincing stores to put them on the shelves.

Jane decides that the marketing department hasn’t been working hard enough to convince people to buy them, so she orders a $10 million ad campaign. Big commitment escalation. The production of the bears cost $7 million and now she's layering on another 10 large.

That doesn’t work either.

She subsequently fires the marketing department and hires new people at twice the salary to market the nightmare bears. Now emotional commitment is escalating as well...beyond "just" the financial.

They’re still not selling, and the company is neglecting the cuddly teddy bears that it actually can sell. But Jane won’t give up on the bears of her dreams...until the CEO fires her for costing the company millions of dollars and production time because she wouldn’t just let go of the fact that her teddy bear line wasn’t selling.