Emotions in motion: Escalation of commitment in investment decisions

The purpose of this study is to better understand whether emotional aspects affect entrepreneurs’ and owner-managers’ decisions in investment situations when escalation of commitment can be observed and where the level of uncertainty was also added to the emotional aspect. The study was performed using conjoint analysis (a.k.a stated preference technique) and yielded following results: positive emotions (self-confidence and hope) increase the decision-maker’s propensity to escalate. The same effect is observed if the situation is perceived as challenging. Frustration and embarrassment do not, on the other hand, make the entrepreneur prone to escalate. The result remains the same for all emotions but strain regardless of the level of uncertainty. Strain does not in any case affect escalation propensity.