Escalating Commitment: Business Investments and CSR

There are many instances, in all areas of business, in which individuals can become committed to a course of action that begins costing more than it is producing. Because it is often possible for persons who have suffered a setback to recoup their losses through an even greater commitment of resources to the same course of action, a cycle of escalating commitment can be produced (Staw, 1981). This thesis serves to address prior literature and prior studies based on the theory of escalation behavior . We furthered our research by conducting an experiment using university students to test certain said theory with the incorporation of specific variables (i.e. tax-avoidance strategies vs. sustainable investing). As such, this thesis was designed with the purpose of trying to understand why such behavior exists and what factors may have significant influence on the cycle known as escalating commitment