Advanced Search
MyIDEAS: Login to save this paper or follow this series

Escalation of Commitment in Investment Decisions: The Role of Emotions under Uncertainty

Contents:

Author Info

  • Brundin, Ethel

    ()
    (Jönköping International Business School)

  • Gustavsson, Veronica

    ()
    (Jönköping International Business School)

Abstract

The purpose of this study is to better understand whether emotional aspects affect entrepreneurs’ and owner-managers’ decisions in investment situations when escalation of commitment can be observed and where the level of uncertainty was also added to the emotional aspect. The study was performed using conjoint analysis (a.k.a stated preference technique) and yielded following results: positive emotions (self-confidence, challenge, and hope) increase the decision-maker’s propensity to escalate commitment. Negative emotions (embarrassment and strain) do not, on the other hand, make the entrepreneur prone to escalate. The result remains the same for all positive emotions where an increasing level of uncertainty tends to make the entrepreneur more prone to escalate. Strain and embarrassment, under high uncertainty, decrease the tendency to escalate. All results are significant except for frustration that does not show any significant relationship. The combination of cognitive decision theories and emotional theories enhances our knowledge about the emotive side of entrepreneurs’ motives to escalate. The results also enable us to supplement and refine existing theories on self-justification.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ihh.hj.se/ciseg/documents/CISEG-WP-No-3.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.ihh.hj.se/ciseg/documents/CISEG-WP-No-3.pdf [301 Moved Permanently]--> http://hj.se/jibs/ciseg/documents/CISEG-WP-No-3.pdf). If this is indeed the case, please notify (Katarina Blåman)
Download Restriction: no

Bibliographic Info

Paper provided by Centre for Innovation Systems, Entrepreneurship and Growth, Jönköping International Business School in its series CISEG Working Papers Series with number 3.

as in new window
Length: 20 pages
Date of creation: 05 Dec 2008
Date of revision:
Handle: RePEc:hhs:hjiseg:0003

Contact details of provider:
Postal: CISEG (Centre for Innovation Systems, Entrepreneurship and Growth), Jönköping International Business School, P.O. Box 1026, SE-551 11 Jönköping, Sweden
Phone: 036-157700
Fax: 036-165069
Web page: http://www.ihh.hj.se/eng/
More information through EDIRC

Related research

Keywords: Emotions; Escalation of commitment; Uncertainty; Entrepreneurs;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Connolly, Terry & Ordonatez, Lisa D. & Coughlan, Richard, 1997. "Regret and Responsibility in the Evaluation of Decision Outcomes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 70(1), pages 73-85, April.
  2. Muramatsu, Roberta & Hanoch, Yaniv, 2005. "Emotions as a mechanism for boundedly rational agents: The fast and frugal way," Journal of Economic Psychology, Elsevier, vol. 26(2), pages 201-221, April.
  3. Brundin, Ethel & Patzelt, Holger & Shepherd, Dean A., 2008. "Managers' emotional displays and employees' willingness to act entrepreneurially," Journal of Business Venturing, Elsevier, vol. 23(2), pages 221-243, March.
  4. Dequech, David, 2000. "Confidence and action: a comment on Barbalet," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 29(6), pages 503-515, November.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:hjiseg:0003. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Katarina Blåman).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.