Escalation of Commitment in (managerial...

With this project we aim to analyze the impact of a foreign language on escalation of commitment due to the sunk cost effect, i.e., the tendency to remain committed to a failing course of action and to allocate further resources to the course of action despite negative feedback. We conduct an online experiment to investigate whether decision-makers who use a foreign language when making investment decisions are less susceptible to this specific case of cognitive biases as compared to decision-makers who are presented the decision-situation in their native language. Based on prior research on this so called Foreign Language Effect we expect individuals using a foreign (native) language to engage in a more (less) deliberate mode of thinking and in more (less) systematic processing, to experience more (less) cognitive and psychological distance, to be less (more) emotional, and act less (more) intuitively.  For our experimental study, we use a case study based on the seminal research on escalation of commitment by Staw (1976) and a thereto connected online-survey.