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Escalation Bias: Does It Extend to Marketing?

By J. Scott Armstrong, Nicole Coviello and Barbara Safranek


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

Topics: Behavioral Analysis
Year: 1993
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