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Related Experiment Video

Updated: Jul 19, 2026

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Published on: May 9, 2019

Optimism as modifier of escalation of commitment.

Asgeir Juliusson¹

¹Göteborg University, Sweden. Asgeir.Juliusson@psy.gu.se

Scandinavian Journal of Psychology

|September 22, 2006

Summary

Optimism encourages escalating commitment to failing investments, while pessimism promotes de-escalation. These effects intensify with ambiguous outcomes, revealing how dispositional optimism-pessimism influences financial decision-making.

Area of Science:

Behavioral Economics
Cognitive Psychology

Background:

Escalation of commitment is a well-documented bias.
The role of individual differences, such as optimism-pessimism, in this bias requires further investigation.

Purpose of the Study:

To investigate how optimism-pessimism influences the escalation of commitment following an unsuccessful investment.
To examine the moderating effect of outcome probability ambiguity on this relationship.

Main Methods:

52 undergraduates participated in an investment task.
Participants experienced an initial unsuccessful investment.
Optimism or pessimism was induced by manipulating the probability of future success.
Participants then decided whether to continue or discontinue the investment.

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Task Interruption and Resumption Paradigm for Testing the Activation and Pursuit of an Abstract Thinking Goal

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Last Updated: Jul 19, 2026

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Dissociation of the Confounding Influences of Expectancy and Integrative Difficulty Residing in Anomalous Sentences in Event-related Potential Studies

Published on: May 9, 2019

Task Interruption and Resumption Paradigm for Testing the Activation and Pursuit of an Abstract Thinking Goal

Task Interruption and Resumption Paradigm for Testing the Activation and Pursuit of an Abstract Thinking Goal

Published on: April 18, 2017

Main Results:

Optimistic participants were more likely to continue investments than pessimistic participants.
Increased sunk costs led to escalation of commitment in optimistic individuals and de-escalation in pessimistic individuals.
The influence of optimism-pessimism on escalation was amplified under ambiguous outcome probabilities.

Conclusions:

Dispositional optimism-pessimism significantly modifies escalation of commitment behavior.
Pessimism may serve as a protective mechanism against the sunk cost fallacy.
Understanding individual differences is crucial for mitigating investment biases.