Escalation of Commitment: Definition & Examples

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  • 0:02 Escalation of…
  • 1:13 Examples
  • 1:55 Identifying and Mitigating
  • 2:28 Lesson Summary
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Lesson Transcript
Instructor: Dr. Douglas Hawks

Douglas has two master's degrees (MPA & MBA) and a PhD in Higher Education Administration.

Sometimes sticking to a decision is important, but other times it is a dangerous tendency that results in magnifying the impact of a poorly made decision. In this lesson you'll learn about the concept of escalation of commitment, why it happens, why it's bad, and how you can stop it from happening.

Escalation of Commitment Defined

In 1966 a project to build a nuclear power plant in Long Island, New York began. It was anticipated it would cost $75 million and be able to generate power for the growing city by 1973. No one anticipated the pushback from local citizens, and because of that resistance the project wasn't completed until 1986 at a cost of more than $6 billion. In the end, the plant never opened.

Why was management at the Long Island Lighting Company so willing to stick to their project even as the cost skyrocketed and the completion date was pushed back by more than two decades? The answer is escalation of commitment.

Escalation of commitment happens when someone continues to dedicate resources, including time and money, to a failing course of action. Like management at the Long Island Lighting Company, it is sometimes easy to feel that if we give up on a course of action, then we lose the money and time already committed to that decision. In response, we sometimes continue to commit resources in an attempt to turn our failure around, thereby increasing the cost and making it that much harder to just acknowledge a bad decision and move on.

Escalation of Commitment Examples

Escalation of commitment is a common practice in both our professional and personal lives. When an investor buys stock expecting the price to rise and then continues to buy more and more as the price drops, they are escalating their commitment. Instead of their original plan of investing $10,000, they end up paying in much more in an attempt to make their original decision right.

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