Why Do Leaders Escalate Their Commitment to a Failed Course of Action? A Moderated-Mediation Personality Traits Model

Abstract

Escalation of Commitment (EoC) relates to decision-makers’ tendency to commit resources to a failing course of action. The current study attempts to expand the understanding of personality traits as factors that potentially engender EoC by offering an EoC-prone personality profile. Our moderated-mediation model illustrates how extraversion affects EoC through the mediations of sensation-seeking, and how hubris moderates the effect of sensation-seeking on EoC. The results are based on data gleaned from an online questionnaire completed by 314 respondents from various managerial levels employed among wide-ranging Israeli industries. Data was obtained via network respondent-driven sampling from a 500 managers’ sample. The model was tested using Hayes’s Process procedure. Sensation-seeking was found to fully mediate the relationship between extraversion and EoC, while hubris was found to moderate the relationship between sensation-seeking and EoC. Managerial implications and future research directions are suggested.