Actively watch for escalation of commitment

Each new investment in a losing course makes the next exit harder — catch escalation early.

Why it works

Staw’s research on escalation of commitment shows that decision-makers responsible for a prior bad decision invest more in it than unrelated decision-makers would, and do so in increasing amounts. Each additional investment becomes its own sunk cost, compounding the trap. Recognizing the escalation pattern early — before it becomes a multi-year trap — is substantially easier than stopping later.

How to do it

1. Periodically review ongoing projects and commitments with the question: "Am I investing more to justify prior investment?"
2. Track successive investment levels: if each round is larger than the last without proportional expected return improvement, that is an escalation signal.
3. Name the pattern explicitly to yourself: "I am escalating this commitment."
4. Seek outside evaluation at the first escalation signal rather than waiting for crisis.

Evidence

Escalation of commitment is a well-documented organizational and individual phenomenon, particularly when decision-makers are personally responsible for the initial commitment. Staw (1976, 1981) provides the foundational experimental and organizational research. (observational)

Escalation effects are strongest when personal responsibility and social visibility are high; individual private decisions show smaller effects.

Sources

• Staw (1976), knee-deep in the big muddy: a study of escalating commitment, Organizational Behavior and Human Performance
• Staw, B. M. (1976). Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27-44.
• Staw, B. M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 577-587.

Common mistake

Noticing the escalation pattern only in retrospect — after each successive investment was too small to seem alarming on its own but added up to a large total.