IDEAS home Printed from https://ideas.repec.org/a/uii/jcauii/v2y2020i1p49-61.html
   My bibliography  Save this article

The Effect Of Sunk Cost, Framing Effect, And Educational Background On The Escalation Of Commitment

Author

Listed:
  • Astria Wulan Permatasari
  • Laeli Budiarti
  • Kiky Srirejeki

    (Department of Accounting, Universitas Indonesia, Jakarta, Indonesia
    Department of Accounting, Universitas Jenderal Soedirman, Purwokerto, Indonesia
    Department of Accounting, Universitas Jenderal Soedirman, Purwokerto, Indonesia)

Abstract

The purpose of this study is to examine whether negative framing and sunk costs affecting the escalation of commitments with an educational background as moderating variable. The study uses an experimental study approach with 2 x 2 x 2 within-subjects design. There were 39 managers from a state-owned enterprise who participated in this experiment. The result indicates that sunk costs and negative framing effect the escalation of commitment. In contrast, the educational background did not moderate the relationship between sunk cost and negative framing to the escalation of commitment.

Suggested Citation

  • Astria Wulan Permatasari & Laeli Budiarti & Kiky Srirejeki, 2020. "The Effect Of Sunk Cost, Framing Effect, And Educational Background On The Escalation Of Commitment," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 2(1), pages 49-61, May.
    • Handle: RePEc:uii:jcauii:v:2:y:2020:i:1:p:49-61
    DOI: 10.20885/jca.vol2.iss1.art5
    as

    Download full text from publisher

    File URL: https://journal.uii.ac.id/JCA/article/download/18192/11105
    Download Restriction: no
    File URL: https://journal.uii.ac.id/JCA/article/view/18192/11105
    Download Restriction: no
    File URL: https://libkey.io/10.20885/jca.vol2.iss1.art5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ayu Chairina Laksmi & Savero Izkha Al Hafis, 2019. "The Influence Of Accounting Students’ Perception Of Public Accounting Profession: A Study From Indonesia," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(1), pages 47-63, January.
    2. MOHAJAN, Haradhan Kumar, 2017. "Two Criteria For Good Measurements In Research: Validity And Reliability," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 17(4), pages 59-82.
    3. Hélène Delacour & Sébastien Liarte, 2012. "The Red Queen Effect: Principle, synthesis and implications for strategy," Post-Print hal-01380659, HAL.
    4. Dekar Urumsah & Heri Ramadhansyah, 2019. "Investigating the influence of business intelligence on the quality of decision making in an Indonesian fertilizer company," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(2), pages 120-129.
    5. David J Sharp & Stephen B Salter, 1997. "Project Escalation and Sunk Costs: A test of the International Generalizability of Agency and Prospect Theories," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(1), pages 101-121, March.
    6. Dekar Urumsah & Heri Ramadhansyah, 2019. "Investigating The Influence Of Business Intelligence On The Quality Of Decision Making In An Indonesian Fertilizer Company," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(2), pages 120-129, May.
    7. Siti Maria Wardayati & Muhammad Miqdad & Husnul Irfan Efendi & Frisma Novela Arisandy, 2019. "Performance Improvement Through Internal Control, Experience And Individual Rank," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(2), pages 107-119, May.
    8. Ayu Chairina Laksmi & Savero Izkha Al Hafis, 2019. "The influence of accounting students’ perception of public accounting profession: A study from Indonesia," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 1(1), pages 47-63.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mithaq Mahmood Al Kharousi & Bedoor Nasser Al Shukaili & Mohammed Muneerali Thottoli, 2023. "Students' Perceptions of Management Accounting and the Accounting Profession," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 5-15, June.
    2. Mohajan, Haradhan, 2021. "Cradle to Cradle is a Sustainable Economic Policy for the Better Future," MPRA Paper 111334, University Library of Munich, Germany, revised 10 Oct 2021.
    3. Mohajan, Devajit & Mohajan, Haradhan, 2023. "Glaserian Grounded Theory and Straussian Grounded Theory: Two Standard Qualitative Research Approaches in Social Science," MPRA Paper 117017, University Library of Munich, Germany, revised 20 Feb 2023.
    4. Lee, Hyoungjin & Park, Junmin & Chung, Chris Changwha, 2022. "CEO compensation, governance structure, and foreign direct investment in conflict-prone countries," International Business Review, Elsevier, vol. 31(6).
    5. Robert Hassink & Dong-Ho Shin, 2005. "Guest Editorial," Environment and Planning A, , vol. 37(4), pages 571-580, April.
    6. Mohajan, Haradhan, 2020. "Quantitative Research: A Successful Investigation in Natural and Social Sciences," MPRA Paper 105149, University Library of Munich, Germany, revised 15 Nov 2020.
    7. Antonio Cejudo & Víctor Jesús Moreno-Alcaraz & Riccardo Izzo & Francisco Javier Robles-Palazón & Pilar Sainz de Baranda & Fernando Santonja-Medina, 2020. "Flexibility in Spanish Elite Inline Hockey Players: Profile, Sex, Tightness and Asymmetry," IJERPH, MDPI, vol. 17(9), pages 1-14, May.
    8. Mohajan, Devajit & Mohajan, Haradhan, 2022. "Memo Writing Procedures in Grounded Theory Research Methodology," MPRA Paper 115246, University Library of Munich, Germany, revised 10 Aug 2022.
    9. Elena Grimaccia & Alessia Naccarato, 2020. "Confirmatory factor analysis to validate a new measure of food insecurity: perceived and actual constructs," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(4), pages 1211-1232, August.
    10. Syahrial Syahrial & Sri Winarni, 2021. "Identification Test of Ability to Understand Multiple Representation in Basic Chemistry I Course: Validity and Reliability," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(6), pages 99-104, June.
    11. Samuel Y. Todd & Tamara A. Crook & Tony Lachowetz, 2013. "Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies," Business and Management Research, Business and Management Research, Sciedu Press, vol. 2(2), pages 13-21, June.
    12. Duxbury, Darren, 2012. "Sunk costs and sunk benefits: A re-examination of re-investment decisions," The British Accounting Review, Elsevier, vol. 44(3), pages 144-156.
    13. Marion Festing & Ihar Sahakiants, 2011. "Determinants of share-based compensation plans in Central and Eastern European public companies: An institutional analysis," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(4), pages 338-357.
    14. Mohajan, Haradhan, 2021. "Global COVID-19 Pandemic: Prevention and Protection Techniques," MPRA Paper 106923, University Library of Munich, Germany, revised 19 Jan 2021.
    15. Mohajan, Haradhan, 2022. "Four Waves of Feminism: A Blessing for Global Humanity," MPRA Paper 114328, University Library of Munich, Germany, revised 09 Jul 2022.
    16. Mohajan, Devajit & Mohajan, Haradhan, 2022. "Sensitivity Analysis among Commodities and Prices: A Utility Maximization Perception," MPRA Paper 116232, University Library of Munich, Germany, revised 15 Dec 2022.
    17. Jinghan Yuan & Hansong Zou & Kefan Xie & Maxim A. Dulebenets, 2021. "An Assessment of Social Distancing Obedience Behavior during the COVID-19 Post-Epidemic Period in China: A Cross-Sectional Survey," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    18. Mohajan, Devajit & Mohajan, Haradhan, 2023. "Families of Grounded Theory: A Theoretical Structure for Novel Researchers," MPRA Paper 116752, University Library of Munich, Germany, revised 24 Jan 2023.
    19. Mohajan, Haradhan, 2022. "An Overview on the Feminism and Its Categories," MPRA Paper 114625, University Library of Munich, Germany, revised 02 Jul 2022.
    20. Mohajan, Devagit & Mohajan, Haradhan, 2022. "Profit Maximization Strategy in an Industry: A Sustainable Procedure," MPRA Paper 114675, University Library of Munich, Germany, revised 21 Jun 2022.

    More about this item

    Keywords

    Escalation of commitment; framing effect; sunk cost; educational background; prospect theory.;
    All these keywords.

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uii:jcauii:v:2:y:2020:i:1:p:49-61. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Yuliani (email available below). General contact details of provider: https://journal.uii.ac.id/JCA/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.