The Role of Emotional Intelligence in Escalation of Commitment Decisions: An Empirical Investigation

Author

Brandon William Soltwisch, Southern Illinois University CarbondaleFollow

Date of Award

12-1-2012

Degree Name

Doctor of Philosophy

Department

Business Administration

First Advisor

Karau, Steven

Abstract

Escalation of commitment refers to the tendency of decision makers to continue with failing courses of action (Staw, 1981). An abundance of research has shown that decision makers persistently escalate commitment to less favorable alternatives when making a series of decisions related to a single course of action. This decision making fallacy occurs across a wide range of personal and professional settings, and has significant implications for management and policy. There has been a wealth of research suggesting various explanations for why escalating commitment occurs across a wide range of situations; however, there have been relatively few studies investigating factors that may reduce this type of irrational decision making. Emotional intelligence is the ability to recognize and understand emotional information in oneself and others and use that information to guide one's thinking and behavior (Salovey & Mayer, 1990). This study investigated the previously unexplored relationship between emotional intelligence and escalation of commitment decisions. It also examined whether anticipatory emotions and risk perceptions mediate the relationship between emotional intelligence and escalation of commitment. It was hypothesized that individuals who have higher emotional intelligence will be less likely to commit additional funds to unfavorable courses of action, and that this relationship is mediated by anticipatory emotions and risk perceptions. These hypotheses were tested using a scenario based experiment with 110 undergraduate students at a large Midwestern university. Escalation of commitment was measured using Staw's (1976) "Adams & Smith Financial Decision Case" (p.30). Emotional intelligence was measured using the 33-item emotional intelligence scale (Schutte, Malouff, Hall, Haggerty, Cooper, Golden, & Dornheim, 1998) The relationship between emotional intelligence and escalation of commitment was tested using regression analysis, and the mediating relationships (anticipatory emotions, risk perceptions) were tested using Baron and Kenny's (1986) mediation procedure. Findings from the study reveal several practical and theoretical contributions. Results suggest that emotional intelligence is not significantly related to escalation of commitment. However, anticipatory emotions were shown to play an important role in one's tendency to escalate commitments. Those who anticipated more positive emotions about finishing the course of action were significantly more likely to escalate commitments toward its completion. In addition, managerial experience was significant in reducing one's tendency to escalate commitments. Results, strengths, weaknesses and future research directions are discussed in relation to the current study.