Escalation Bias: Does It Extend to Marketing?
AbstractEscalation bias implies that managers favor reinvestments in projects that are doing poorly over those doing well. We tested this implication in a marketing context by conducting experiments on advertising and product-design decisions. Each situation was varied to reflect either a long-term or a short-term decision. Besides these four conditions, we conducted three replications. We found little evidence of escalation bias by 365 subjects in the seven experimental comparisons.
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Bibliographic InfoPaper provided by EconWPA in its series General Economics and Teaching with number 0502036.
Length: 11 pages
Date of creation: 11 Feb 2005
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escalation bias; marketing;
Find related papers by JEL classification:
- A - General Economics and Teaching
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
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