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Studies in the psychological laboratory 365
testing. The experimenter provides feedback, telling the individual in
each case whether the triple conforms or not. Individuals are instructed
not to announce the rule until they are quite sure that they know it. The
experimenter’s rule is, in fact, simply ‘any ascending sequence’ but most
people formulate hypotheses such as ‘ascending in equal intervals’ and
test triples such as 4 8 12 or 20 40 60, etc. Eventually they announce their
rule and are convinced of its correctness. In other words, individuals
formulate positive tests that can never be falsified. 20
In the real world of strategic decision making such clear-cut, falsifying
evidence will be very rare and, perhaps, is therefore even less likely to
be sought out and/or be recognized as significant for the falsification of
a currently followed strategy. Taken together, the laboratory results of
conservatism in opinion revision, anchoring and insufficient adjustment,
and the confirmation bias are analogies of inertia and instrumentalism
in strategic decision making. Additionally, generalization of these laboratory
results suggests that inertia and incrementalism may well be
pervasive in strategic thinking.
Another approach in behavioral decision making has focused on the
unwillingness of individuals (and groups of individuals) to reverse a
series of decisions if they feel high personal responsibility for poor
outcomes occurring early in the sequence. ‘Non-rational escalation of commitment’
refers to the tendency of individuals to escalate commitment to
a previously selected course of action to a point beyond which a rational
model of decision making would prescribe. In many studies, individuals
who hold themselves responsible for a poor initial decision throw good
money after bad and fail to recognize that time and/or expenses already
invested are sunk costs. The decision maker, in face of negative feedback
about the consequences of his earlier decision, feels the need to affirm
the wisdom of it by further commitment of resources so as to ‘justify’
the initial decision or provide further opportunities for it to be proven
correct. Negative feedback is rationalized away as ephemeral rather than
carrying an important message about the quality of the prior decision.
Staw and Ross 21 showed that the tendency to escalate commitment
by high-responsibility individuals was particularly pronounced where
there was some way to develop an explanation for the initial failure
such that the failure was viewed as unpredictable and unrelated to
the decision maker’s action (e.g. the economy suffered a severe setback
and this caused ...). Bazerman, Giuliano and Appelman 22 showed that
groups who made an initial collective decision that proved unsuccessful
allocated significantly more funds to escalating their commitment
to the decision than did groups who ‘inherited’ the initial decision. 23