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| Decision-Making and Fairness: Implications & Future Directions |
| Monday, May 25, 2009 |
| 9:00 AM–10:20 AM |
| North 221 C |
| Chair: Bess Puvathingal (Temple University) |
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| Revisiting the Fog of War: Middle Eastern Foreign Policy as Escalation of Commitment |
| Domain: Applied Behavior Analysis |
| BESS PUVATHINGAL (Temple University), Donald A. Hantula (Temple University) |
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| Abstract: Escalation of commitment is when decision makers “irrationally” recommit resources to a failing course of action. The United States is currently waging two controversial wars in the Middle East. Does a timeline for withdrawal in Iraq make sense? When should we leave? Why are we still there? These questions are at the forefront of a new presidential administration that is charged with making crucial foreign policy decisions. These decisions are analyzed from a behavioral economic framework. Specifically, we apply research on escalation of commitment to understanding decision making in this war context. Empirical evidence suggests that an interaction of several variables (e.g., sunk costs, uncertainty of outcome, history of reinforcement) lead to increased escalation in unsuccessful courses of action. We review data relevant to decision making in the war effort and show that the persistence in the war as well as ‘the surge’ are predictable from a behavioral escalation perspective. In a time when US approval ratings on the Iraqi war are at an all-time low and we seem mired in uncertainty on how to proceed, our analysis examines the “irrationality” of US involvement in the Middle East and suggests solutions. |
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| Escalation and the Sunk Cost Effect: Too Invested or Too Confused to Quit? |
| Domain: Applied Behavior Analysis |
| BESS PUVATHINGAL (Temple University), Donald A. Hantula (Temple University) |
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| Abstract: Escalation of commitment and the sunk cost effect have often been erroneously used interchangeably. Escalation is when decision makers “irrationally” recommit resources to a failing course of action, while the sunk cost effect is a maladaptive economic behavior that is manifested in a greater tendency to continue with a project once an investment has been made. From an economic standpoint, future prospects should guide rational decision making; going one step further, it is irrational to consider prior costs in current prospects. In stark contrast to the traditional economic perspective, the behavior analytic perspective suggests that prior events properly set the stage for decision making. Previous research in behavior analysis and economics implicates equivocality (intermittent reinforcement) as a primary cause of escalation. Sunk cost and equivocality have been studied separately, but have yet to be studied simultaneously in an experiment. Analyzing the interaction of sunk cost and equivocality in investment decisions, we find that sunk cost effects exert influence on decision making early on, but continued escalation in a failing venture is due to feedback equivocality. Implications for executive decision making in risky and uncertain ventures are discussed. |
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| Perceived "Fairness" of Groups and Organizations: A Human Foraging Rule? |
| Domain: Applied Behavior Analysis |
| SONIA M. GOLTZ (Michigan Technological University) |
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| Abstract: The present analysis suggests that concepts from behavioral ecology, behavior analysis, and fairness heuristic theory can be integrated to better understand and study the concept of perceived "fairness" of groups and organizations. The concept of fairness is thought to be a rule that governs the behavior of individuals in choosing to how to allocate their limited time and energy to numerous possible groups and organizations, each of which have competing demands on the individual as well as different payoffs. Furthermore, groups and organizations are seen as operating like the competing "patches" found in discussions of foraging in behavioral ecology. These group and organizational "patches" differ in that they have different reinforcement schedules and contingencies operating, including extinction. In addition, contingencies in organizations can have differing reliabilities with which the contingencies operate and there can also be inconsistencies between advertised contingencies and actual contingencies. Individuals are thought use their direct or indirect experiences with these contingencies to derive the rule that some groups are "fair" and others aren't and that to maximize outcomes (relative to costs), "unfair" groups must be avoided and "fair" groups must be sought. Implications for the organizational justice literature are discussed. |
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