Pride before the fall: Overconfidence predicts escalation of public commitment
Ronay, R., Oostrom, J. K., Lehmann-Willenbrock, N., & van Vugt, M. (2017). Pride before the fall: Overconfidence predicts escalation of public commitment. Journal of Experimental Social Psychology, 69, 13-22.
In four studies we examined the effect of overconfidence on escalation of commitment in investment tasks. Study 1 (N=105) revealed a positive relationship between overconfidence and decisions to escalate. In contrast, Study 2 (N=121) showed that overconfidence was negatively related to escalation of commitment. The reversal of this effect appeared to emerge as a function of the public (Study 1) versus private (Study 2) context in which the investment decisions were made. In Study 3 (N=108) and Study 4 (N=380) we experimentally replicated this pattern of findings and found support for the explanatory role of reputational concerns. A meta-analysis of the findings from our four studies showed that overconfidence is positively related to escalation of commitment in public contexts, and that this relationship is absent when decisions are made privately.
Keywords: overconfidence, confidence, escalation of commitment, reputation, decision-making