Niro Sivanathan talks about how to help employees avoid throwing good money after bad.

Mike interviews Niro Sivanathan about a study he and his colleagues recently conducted on the phenomenon of escalation of commitment, where people invest additional resources in failing projects. He talks about how escalation often occurs when people want to justify their past decisions. They find that escalation can be averted by providing people with self-affirming feedback, which reduces their need to self-justify their past decisions.

Niro Sivanathan (n-sivanathan@kellogg.northwestern.edu) is a PhD candidate in the Management & Organizations department at the Kellogg School of Management and will be joining the Organisational Behaviour department at the London Business School as an Assistant Professor in September of 2008. His research focuses broadly on the impact of psychological and economic incentives on judgments and behavior, with interests in trust development, dynamics of power, reputation mechanisms, and the scurrilous behaviors that arise from competitions.

Date of the interview: April 10, 2008

Recommended further readings:

Sherman, D. K., & Cohen, G. L. (2002). Accepting threatening information: Self-affirmation and the reduction of defensive biases. Current Directions in Psychological Science, 11, 119-123.

Sivanathan, N., Molden, D. C., Galinsky, A., & Ku, G. (in press) The promise and peril of de-escalating commitment through self-affirmation. Organizational Behavior and Human Decision Processes.

Staw, B. M., & Ross, J. (1987). Knowing when to pull the plug. Harvard Business Review, 65: 68-74.

Brockner, J. (1992). The Escalation of Commitment to a Failing Course of Action: Toward Theoretical Progress. Academy of Management Review, 17, 39-61.

Michael Johnson is an Assistant Professor in Department of Management and Organization at the University of Washington. He can be reached via mdj3@u.washington.edu