The role of evaluability bias and the fairness effect in the escalation of commitment to troubled software product development projects

Abstract

New software product development entails considerable risks. One significant risk is that decision makers can become overly committed to troubled software product development projects (i.e., escalation of commitment). While prior research has identified factors that promote escalation in information technology projects, there has been little attempt to leverage the context of software product development, which can include evaluating attributes of a software product under development and weighing a personal financial reward tied to a successful product launch. In this study, we conducted two experiments to investigate how evaluability bias concerning software attributes and the fairness effect that arises from the relative amount of a personal financial reward influence the escalation of commitment to troubled software product development projects. Our findings suggest that the escalation of commitment to troubled software product development projects is influenced by both evaluability bias, which affects the perceived attractiveness of a software product under development, and the fairness effect, which influences the perceived attractiveness of a personal financial reward tied to a successful product launch. This study contributes to both the information systems literature and the escalation literature by providing novel theoretical explanations as to why escalation occurs in the context of new software product development.