The role of information asymmetry in escalation phenomena: Empirical evidence

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2009
Volume: 69
Issue: 2
Pages: 135-147

Authors (3)

Berg, Joyce E. (not in RePEc) Dickhaut, John W. Kanodia, Chandra (not in RePEc)

Score contribution per author:

0.673 = (α=2.02 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Economic rationality dictates that only incremental costs and benefits should affect decisions. Observed behavior often seems to violate this principle, resulting in unwarranted commitment to past choices and their escalation. In this paper, we present experimental results that show that information asymmetry plays a key role in determining when such escalation behavior occurs. This finding opens new avenues for mitigating escalation behavior since information asymmetry is an environmental feature that can be modified by organization design and explicit economic rewards.

Technical Details

RePEc Handle
repec:eee:jeborg:v:69:y:2009:i:2:p:135-147
Journal Field
Theory
Author Count
3
Added to Database
2026-01-25