Escalation of commitment refers to a behavioral phenomenon whereby a group of people who have embarked upon a decision which is producing increasingly negative outcomes continue forward with their course of action despite the accumulating evidence of bad results. This sounds ridiculous, but it is a very frequent pattern in human behavior. It is worth casting our minds back 100 years to 1917 when the First World War ground into its 3rd year despite the deaths of millions of combatants on both sides. In economics, a very similar situation is described as the “sunk cost fallacy’: throwing away more and more resources because the idea of losing the time and money already invested is too painful to bear. One sees this at casinos all of the time, when a punter keeps grinding tokens into a machine waiting for it to pay out. One sees it in casino owners who build lavish follies with borrowed money even after the gamblers have all been fleeced or given up. One sees it in institutional investors which will not give up on certain bankrupt debtors because the banks themselves will lose too much money.
The reasons for escalation of commitment are manifold, but boil down to certain unpleasant fundamentals about human preferences and decision making. Changing one’s mind is difficult because it involves admitting an error. Additionally, it is more painful to lose something than it is pleasant to gain something (a dreadful dictum which explains so much of human behavior). Leadership norms punish seemingly inconsistent behavior more than bad results; if a leader admits a problematic course of action and changes it, they are more likely to be punished than if they just went ahead with whatever idiotic thing they were going to do anyway.
All of this is to highlight that people have an astonishing ability to lie to themselves when they have done a colossally stupid thing. They will continue onward with such behavior in the face of rational evidence and will fall into certain tribal behaviors which make it even harder to escape the spiral of collapse.
These factors make terrible decisions particularly dangerous. Historians are always looking back and exclaiming “How could they have kept on with this course of action?”
And, of course, there are counter examples and arguments. It is Impossible to ever reap the rewards of a risky investment if one abandons a project too hastily. Would Columbus have reached America if he had given in to the terrors of apparently endless ocean? Would Thomas Edison have persevered through all of those hundreds of unsuccessful filament materials to the electric lightbulb? Yet some of those filaments glimmered or shone brightly for a moment. The Santa Maria did not fall off a giant waterfall at the edge of the world but instead the sailors saw evidence of land. Evidence should help us escape the dreadful escalation of commitment.
If a leader is behaving erratically, wickedly, and stupidly is it wise to ignore such behavior, in the belief that he will somehow correct himself? If there is no coherent plan but merely bombast, corruption, and hollow stage-managed cheers, why would you choose to cheer along?
Once you have invested enough effort in a bad idea or a terrible leader, it isn’t possible to escape. Human behavior means you must follow…even if it leads to Changping, Verdun, or a bunker beneath Berlin. If I learned anything from history class (or from my own failed business with a light-fingered dipsomaniac business partner) it is to be on guard for escalation of commitment early. Don’t go down with somebody else’s leaking ship or drink from their poisoned chalice. Just because you made one bad choice doesn’t mean you have to make more.