Giving it a week and then another week: A case of escalation in decision making

Examines a case study of an unsuccessful employment decision. Explains that although it was apparent soon after the appointment that the employee’s performance fell short of expectations, the employer (a lone trader responsible only to himself), persisted with the appointment for over a year, damaging his business in the process. Seeks to identify the reasons for such apparently irrational behaviour. Concludes that escalation theory overemphasizes the conflict between economic rationality and ego‐defensiveness. Persistence reflects a complex combination of variables, and any judgement of the decision maker’s behaviour is ultimately subjective. Calls into question the bounding assumption of escalation theory that decisions are objectively verifiable. Discusses the theoretical, practical and policy implications of the study.