When Action-Inaction Framing Leads to Higher Escalation of Commitment: A New Inaction-Effect Perspective on the Sunk-Cost Fallacy

Abstract

Escalation of commitment to a failing course of action occurs in the presence of (a) sunk costs, (b) negative feedback that things are deviating from expectations, and (c) a decision between escalation and de-escalation. Most of the literature to date has focused on sunk costs, yet we offer a new perspective on the classic escalation-of-commitment phenomenon by focusing on the impact of negative feedback. On the basis of the inaction-effect bias, we theorized that negative feedback results in the tendency to take action, regardless of what that action may be. In four experiments, we demonstrated that people facing escalation-decision situations were indeed action oriented and that framing escalation as action and de-escalation as inaction resulted in a stronger tendency to escalate than framing de-escalation as action and escalation as inaction (mini-meta-analysis effect d = 0.37, 95% confidence interval = [0.21, 0.53]).