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Psychological Factors in Escalation Situations

Escalation situations are situations in which losses have resulted from an original course of action, but where there is the possibility of turning the situation around by investing further time, money, or effort. A most outstanding example, and currently the subject of extensive notoriety, would be President Lyndon Johnson's escalation of the Vietnam War. Having inherited the War from Presidents Eisenhower and Kennedy, Johnson wanted to believe it was inevitable that an inexperienced, untrained and under-supplied North Vietnamese army would collapse. To this end, and listening to the advise of many of the "best and the brightest" holdovers, Johnson escalated the war, spent more money, sacrificed more lives, and then relinquished the Presidency.

On a lesser scale, of course, everyday examples abound: investors who rationalize away losses by "dollar-cost-averaging" despite declining values; Malibu residents who continue to rebuild their homes after rains and fires devastate the same locations year-in and year-out; and battered women who stay in hopeless relationships believing in who knows what. All share the difficult choice between putting greater effort into the present line of behavior and starting to consider new alternatives. At the organizational level, similar situations prevail: pharmaceutical companies increasing their investments in the research and development of products that are not performing as expected; aerospace and defense contractors bidding for government contracts beyond their expertise or financial wherewithal; County treasurers watching their losses mount and trying to recover by "chasing" the market with riskier investments; Saving and Loan organizations hoping a change in the direction of interest rates would correct earlier ill-considered decisions; and banks continuing to service nonperforming loans in the face of a deteriorating economy. This pathological decision-making has also been referred to as: ...

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Psychological Factors in Escalation Situations. (1969, December 31). In Retrieved 11:11, April 21, 2019, from