Escalation of Commitment Phenomenon in Decision Making

Decision making is counted among the most important management tasks. Decisions can be defected and expose the business to serious problems. Such outcomes can be resulted from failure or decision making errors. Escalation of commitment can be referred to as one of decision making errors. Its mean is that investment to continue decisions that has made in the past and decision makers who are responsible for their decisions outcomes encounter negative feedbacks. This memoire examine escalation of commitment in capital budgeting area. Participants include students in Economics, accounting and finance. The findings imply that escalation of commitment bias cannot affect capital budgeting decisions and so this phenomenon is rejected.