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
E) intuition

Question

Quizplus · Accepted Answer

Arthur's continuing support for a failing project despite the increasing cost and concerns about profitability is an example of escalation of commitment, which occurs when an individual or group continues to invest resources into a failing decision or project, believing that it will eventually succeed.

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