TY - JOUR
T1 - When is escalation of commitment unstoppable in group settings? An iterative economic modeling approach to unveil the dark side of group decision-making
AU - Montecinos-Pearce, Alejandro
AU - Rodrigo, Pablo
AU - Duran, Ignacio J.
N1 - Publisher Copyright:
© 2020 John Wiley & Sons, Ltd.
PY - 2020/12
Y1 - 2020/12
N2 - Escalation of commitment (EOC) has been usually studied from a psychological lens, and only recently have scholars approached EOC from an economic perspective. We contribute to this by focusing on iterative decision-making in group settings with a game theory approach. We study how the group members' strategic interaction may result in continuing failing courses of action. Drawing on the Byzantine generals' problem, our model considers an iterative decision-making process where committee participants vote based on private information to escalate or not. Our article demonstrates that if decision-makers reset their beliefs based on the committee's previous decision, then EOC becomes perpetual.
AB - Escalation of commitment (EOC) has been usually studied from a psychological lens, and only recently have scholars approached EOC from an economic perspective. We contribute to this by focusing on iterative decision-making in group settings with a game theory approach. We study how the group members' strategic interaction may result in continuing failing courses of action. Drawing on the Byzantine generals' problem, our model considers an iterative decision-making process where committee participants vote based on private information to escalate or not. Our article demonstrates that if decision-makers reset their beliefs based on the committee's previous decision, then EOC becomes perpetual.
UR - http://www.scopus.com/inward/record.url?scp=85088792998&partnerID=8YFLogxK
U2 - 10.1002/mde.3190
DO - 10.1002/mde.3190
M3 - Article
AN - SCOPUS:85088792998
VL - 41
SP - 1387
EP - 1402
JO - Managerial and Decision Economics
JF - Managerial and Decision Economics
SN - 0143-6570
IS - 8
ER -