Financial support from National Science Foundation for Distinguished Youth （Grant No.70925006）, National Natural Sciences Fund Program （Grant No.71103059）, Humanities and Social Sciences Youth Program of the Minis...Financial support from National Science Foundation for Distinguished Youth （Grant No.70925006）, National Natural Sciences Fund Program （Grant No.71103059）, Humanities and Social Sciences Youth Program of the Ministry of Education （Grant No. 10YJC7902930）, is gratefully acknowledged. Authors highly appreciate the comments of anonymous reviewers and take sole responsibility for this paper.展开更多
Escalation of commitment has been linked to losses in information systems （IS） projects. Understanding the nature and the rationality of escalation allows the firm to promote optimal project management practices. Th...Escalation of commitment has been linked to losses in information systems （IS） projects. Understanding the nature and the rationality of escalation allows the firm to promote optimal project management practices. This study takes an inter-disciplinary approach and draws on research from economics and management to create a model of irrational escalation and a model of rational escalation. The forces that contribute to irrational escalation include the responsibility of the same manager for both the project selection and project continuation decisions that create proneness to self-justification, the potential for negative framing of decision options due to large sunk costs, the proximity of project completion and the presence of organizational inertia. Identifying these irrational escalation factors helps design appropriate de-escalation techniques. The rational escalation model draws on the real option theory and the bandit process theory to identify conditions when project continuation is justified by the value of information and the value of flexibility that the firm receives from continuing the project.展开更多
基金Financial support from National Science Foundation for Distinguished Youth （Grant No.70925006）, National Natural Sciences Fund Program （Grant No.71103059）, Humanities and Social Sciences Youth Program of the Ministry of Education （Grant No. 10YJC7902930）, is gratefully acknowledged. Authors highly appreciate the comments of anonymous reviewers and take sole responsibility for this paper.
文摘Financial support from National Science Foundation for Distinguished Youth （Grant No.70925006）, National Natural Sciences Fund Program （Grant No.71103059）, Humanities and Social Sciences Youth Program of the Ministry of Education （Grant No. 10YJC7902930）, is gratefully acknowledged. Authors highly appreciate the comments of anonymous reviewers and take sole responsibility for this paper.
文摘Escalation of commitment has been linked to losses in information systems （IS） projects. Understanding the nature and the rationality of escalation allows the firm to promote optimal project management practices. This study takes an inter-disciplinary approach and draws on research from economics and management to create a model of irrational escalation and a model of rational escalation. The forces that contribute to irrational escalation include the responsibility of the same manager for both the project selection and project continuation decisions that create proneness to self-justification, the potential for negative framing of decision options due to large sunk costs, the proximity of project completion and the presence of organizational inertia. Identifying these irrational escalation factors helps design appropriate de-escalation techniques. The rational escalation model draws on the real option theory and the bandit process theory to identify conditions when project continuation is justified by the value of information and the value of flexibility that the firm receives from continuing the project.
