Munich Personal RePEc Archive

Escalation bias: does it extend to marketing?

Armstrong, J. Scott and Coviello, Nicole and Safranek, Barbara (1993): Escalation bias: does it extend to marketing? Published in: Journal of the Academy of Marketing Science No. 21 (1993): pp. 247-253.

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Abstract

Escalation 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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