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Escalation of Commitment as Sunk-Cost Justification: Impact of Individual Status and Reputation

Author

Listed:
  • Sandeep Yadav

    (Indian Institute of Management Kozhikode)

  • Deepak Dhayanithy

    (Indian Institute of Management Kozhikode)

Abstract

Extant literature on escalation of commitment have focused mainly on group, firm and external macro level factors as determinant of firm level decisions. This study examines the impact of individual-level factors on the escalation of commitment (EOC) of team decisions. We draw from the self-justification theory and signaling perspective to examine the impact of sunk cost, status, and reputation of EOC. We used longitudinal data from 2008 to 2019 of the Indian Premier League (IPL) to test the proposed hypotheses. We found sunk cost and player reputation are positively related to the escalation of commitment. We also found the moderating effect of player status on the sunk cost and EOC relationship.

Suggested Citation

  • Sandeep Yadav & Deepak Dhayanithy, 2020. "Escalation of Commitment as Sunk-Cost Justification: Impact of Individual Status and Reputation," Working papers 383, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:383
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