Arthur authorizes the expenditure of an additional $100,000 for the production of a new product despite mounting concerns that it will be unprofitable.The cost of the new product has already increased far beyond the initial plans and projections.Arthur's continuing support for this project illustrates the phenomenon of ________.
A)confirmation bias
B)escalation of commitment
C)overconfidence bias
D)hindsight bias

Question

Quizplus · Accepted Answer

Escalation of commitment refers to the tendency to continue investing resources into a failing project, despite mounting evidence that it will not be successful. In this scenario, Arthur's decision to authorize additional expenditure for the production of a new product despite concerns that it will be unprofitable is an example of escalation of commitment.

Arthur Authorizes the Expenditure of an Additional $100,000 for the Production