Here is the synopsis of our sample research paper on Non-rational Escalating Commitment. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3 page paper looks at how and why non-rational escalation of commitment takes place considering the influences of different types of bias and applying them to an example to demonstrate their influence. The bibliography cites 5 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEesclcom.doc
Buy This Term Paper »
Unformatted sample text from the term paper:
the situation changes and requires more inputs, such as resources, effort of financial support. The escalation of commitment may be rational, where there are logical reasons behind the continued support
for a decision, but the escalation not always be logical when considered in isolation. Consider a small loans officer who authorises a $5,000 to a small business start up. The
business starts up well, takes many orders and the small business, which is making the repayments on time, applies for another loan to help increase the stock to deal with
the new demand. An additional $10,000 is loaned, so now a total of $15,000 has been loaned, with only a few repayments. The business then faces difficulties, and is having
problems repaying the loans. The business applies for another loan to help them gain more business, if they do hot get the loan the business will not survive, but if
the loan is made then it may be successful and be able to repay the total loans. The decision to grant the second and the third loans may both be
seen as escalating commitment, and third loan would certainly be a non rational escalation, the second may also be classified in this manner to a lesser extent. In investment decision
this is also known as the sunk cost fallacy (Howells and Bain, 2007). There are a number of influences on the emergence of non rational escalating commitment. Research indicates
that there is a potential for bias to occur where decision are approached in a serial manner. A good example of this may be those who bid at an auction
for an item, and fund they have paid more than they intended, the decision was not to bid the total amount, but the result of a series of decision each
...