Decision Responsibility, Project Cognition and Escalation of Commitment in Capital Budgeting

摘要

This paper constructs relation model among decision-making responsibility, project cognition and escalation of commitment under framework of self justification theory. It found the following conclusions: when other variables are certain, the stronger (weaker) the generative cognition is, the greater (weaker) the trend to escalate of commitment will be. The decision-making responsibility does not directly influence the investment selection. It just influences investment selection indirectly through influencing cognition decision. Only when decision-making responsibility is associated with generative cognition, it manifests as correlation between decision-making responsibility and generative cognition. This research revealed the coherent logical relationship among decision-making responsibility, generative cognition and escalation of commitment, explained anomalies that can't be explained for a long term in the area of escalation of commitment. Therefore, it is the complement and improvement of self justification theory.