Showing papers in "Journal of Marketing in 2006"
TL;DR: In this article, the authors synthesize relationship marketing empirical research in a meta-analytic framework and show that relationship investment has a large, direct effect on seller objective performance, which implies that additional meditated pathways may explain the impact of relationship marketing on performance.
Abstract: Relationship marketing (RM) has emerged as one of the dominant mantras in business strategy circles, though RM investigations often yield mixed results To help managers and researchers improve the effectiveness of their efforts, the authors synthesize RM empirical research in a meta-analytic framework Although the fundamental premise that RM positively affects performance is well supported, many of the authors’ findings have significant implications for research and practice Relationship investment has a large, direct effect on seller objective performance, which implies that additional meditated pathways may explain the impact of RM on performance Objective performance is influenced most by relationship quality (a composite measure of relationship strength) and least by commitment The results also suggest that RM is more effective when relationships are more critical to customers (eg, service offerings, channel exchanges, business markets) and when relationships are built with an individual person rather than a selling firm (which partially explains the mixed effects between RM and performance reported in previous studies)
2,056 citations
TL;DR: In this article, the authors developed and tested a conceptual framework, which predicts that customer satisfaction partially mediates the relationship between CSR and firm market value (i.e., Tobin's q and stock return), and corporate abilities (innovativeness capability and product quality) moderate the financial returns to CSR, and these moderated relationships are mediated by customer satisfaction.
Abstract: Although prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, it is not clear whether CSR affects market value of the firm. This study develops and tests a conceptual framework, which predicts that (1) customer satisfaction partially mediates the relationship between CSR and firm market value (i.e., Tobin's q and stock return), (2) corporate abilities (innovativeness capability and product quality) moderate the financial returns to CSR, and (3) these moderated relationships are mediated by customer satisfaction. Based on a large-scale secondary data set, the results show support for this framework. Notably, the authors find that in firms with low innovativeness capability, CSR actually reduces customer satisfaction levels and, through the lowered satisfaction, harms market value. The uncovered mediated and asymmetrically moderated results offer important implications for marketing theory and practice.
1,921 citations
TL;DR: This article examined the dynamic patterns of word-of-mouth (WOM) and how it helps explain box office revenue and found that WOM activities are most active during a movie's prerelease and opening week and that movie audiences tend to hold relatively high expectations before release but become critical in the opening week.
Abstract: This article uses actual word-of-mouth (WOM) information to examine the dynamic patterns of WOM and how it helps explain box office revenue. The WOM data were collected from the Yahoo Movies Web site. The results show that WOM activities are the most active during a movie's prerelease and opening week and that movie audiences tend to hold relatively high expectations before release but become more critical in the opening week. More important, WOM information offers significant explanatory power for both aggregate and weekly box office revenue, especially in the early weeks after a movie opens. However, most of this explanatory power comes from the volume of WOM and not from its valence, as measured by the percentages of positive and negative messages.
1,496 citations
TL;DR: In this paper, the authors find that when information pertaining to the assessment of the healthiness of food items is provided, the less healthy the item is portrayed to be, the better is its inferred taste, the more it is enjoyed during actual consumption, and the greater is the preference for it in choice tasks when a hedonic goal is more salient.
Abstract: Across four experiments, the authors find that when information pertaining to the assessment of the healthiness of food items is provided, the less healthy the item is portrayed to be, (1) the better is its inferred taste, (2) the more it is enjoyed during actual consumption, and (3) the greater is the preference for it in choice tasks when a hedonic goal is more (versus less) salient. The authors obtain these effects both among consumers who report that they believe that healthiness and tastiness are negatively correlated and, to a lesser degree, among those who do not report such a belief. The authors also provide evidence that the association between the concepts of “unhealthy” and “tasty” operates at an implicit level. The authors discuss possibilities for controlling the effect of the unhealthy = tasty intuition (and its potential for causing negative health consequences), including controlling the volume of unhealthy but tasty food eaten, changing unhealthy foods to make them less unhealthy...
1,041 citations
TL;DR: In this paper, the authors identify service support and personal interaction as core differentiators, followed by a supplier's know-how and its ability to improve a customer's time to market.
Abstract: Many business customers today consolidate their supply bases and implement preferred supplier programs. Consequently, vendors increasingly face the alternative of either gaining a key supplier status with their customers or being pushed into the role of a backup supplier. As product and price become less important differentiators, suppliers of routinely purchased products search for new ways to differentiate themselves in a buyer–seller relationship. This research investigates avenues for differentiation through value creation in business-to-business relationships. The results suggest that relationship benefits display a stronger potential for differentiation in key supplier relationships than cost considerations. The authors identify service support and personal interaction as core differentiators, followed by a supplier's know-how and its ability to improve a customer's time to market. Product quality and delivery performance, along with acquisition costs and operation costs, display a moderate potential to help a firm gain and maintain key supplier status. Finally, price shows the weakest potential for differentiation.
1,006 citations
TL;DR: In this article, the authors investigate the impact of web site design investments on consumers' trusting beliefs and online purchase intentions and find that such investments signal the component of trusting beliefs that is most strongly related to online purchase intention: ability.
Abstract: The authors investigate the impact of Web site design investments on consumers' trusting beliefs and online purchase intentions. Such investments signal the component of trusting beliefs that is most strongly related to online purchase intentions: ability. These effects were strongest when consumers' goals were to search rather than to browse and when purchases involved risk.
890 citations
TL;DR: In this article, the authors explored recent advances in self-determination research to address why consumers develop strong attachments to "human brands", a term that refers to any well-known persona who is the subject of marketing communications efforts.
Abstract: This article explores recent advances in self-determination research to address why consumers develop strong attachments to “human brands,” a term that refers to any well-known persona who is the subject of marketing communications efforts. Study 1 uses a survey that is analyzed with structural equation modeling. Study 2 is qualitative and offers corroborating evidence for the proposed theoretical model. Study 3 extends the model with a more naturalistic sample and tests several alternative hypotheses using hierarchical regression. The results suggest that when a human brand enhances a person's feelings of autonomy and relatedness and does not suppress feelings of competence, the person is likely to become more strongly attached to it. This article documents that strong attachments are predictive of satisfied, trusting, and committed relationships and proposes that attachment strength may be a parsimonious proxy for consumer–brand relationship strength. The results imply that benefits would accru...
847 citations
TL;DR: In this paper, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity and that satisfied customers are economic assets with high returns/low risk.
Abstract: Do investments in customer satisfaction lead to excess returns? If so, are these returns associated with higher stock market risk? The empirical evidence presented in this article suggests that the answer to the first question is yes, but equally remarkable, the answer to the second question is no, suggesting that satisfied customers are economic assets with high returns/low risk. Although these results demonstrate stock market imperfections with respect to the time it takes for share prices to adjust, they are consistent with previous studies in marketing in that a firm's satisfied customers are likely to improve both the level and the stability of net cash flows. The implication, implausible as it may seem in other contexts, is high return/low risk. Specifically, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity. Yet news about ACSI results does not move share prices. This apparent inco...
814 citations
TL;DR: In this paper, the authors investigate the influence of the extent of service employees' display of positive emotions and the authenticity of their emotional labor display on customers' emotional states and subsequently, customers' assessments of the service interaction and their relationship with the service provider.
Abstract: In this study, the authors examine the effects of two facets of employee emotions on customers' assessments of service encounters. Drawing on emotional contagion and emotional labor theories, they investigate the influence of the extent of service employees' display of positive emotions and the authenticity of their emotional labor display on customers' emotional states and, subsequently, on customers' assessments of the service interaction and their relationship with the service provider. To test the study hypotheses, 223 consumers participated in a simulated service encounter in which actors played the roles of service employees. In a 2 × 2 factorial design, the employees varied both the extent of their smiling behavior and their emotional labor display by engaging in surface or deep acting. The results show that the authenticity of employees' emotional labor display directly affects customers' emotional states. However, contrary to expectations, the extent of employee smiling does not influenc...
786 citations
TL;DR: In this article, the authors demonstrate that loyalty intentions are a function of perceived value early in the life cycle, and over time, more affective attitudes toward the brand and the relationship with the company come to mediate the effects of value on intentions.
Abstract: The drivers of customer loyalty intentions are dynamic. What remains unclear is how these intentions evolve through the introduction and growth phases of a life cycle. Using a longitudinal study of cellular phone customers, the authors demonstrate that loyalty intentions are a function of perceived value early in the life cycle. Over time, more affective attitudes toward the brand and the relationship with the company come to mediate the effects of value on intentions. The results suggest that from the introduction to the growth stage of a life cycle, managers must adapt from improving value per se to measuring and managing relationships and brands directly.
715 citations
TL;DR: In this paper, the authors adopt a more traditional branding perspective and show that the fit between a firm's specific associations and a sponsored cause can reinforce or blur the firm's positioning, influence liking for the sponsored cause, and bolster or undermine the firms' equity.
Abstract: The corporate social responsibility literature has focused on creating broad associations, such as simply being “socially responsible,” and on the simple transfer of positive affect from sponsored causes to sponsoring firms. Both views fail to recognize the power of social initiatives as a means for differentiating among socially responsible firms and, in particular, for reinforcing the brand's positioning. The authors adopt a more traditional branding perspective and show that the fit between a firm's specific associations and a sponsored cause can reinforce or blur the firm's positioning, influence liking for the sponsorship, and bolster or undermine the firm's equity. They also show that communications decisions can mitigate the negative effects of low fit. Finally, they show that sponsorship effects can persist for as long as a year despite day-to-day exposure to other brand communications.
TL;DR: In this article, the authors used survey and experimental data on orange juice and personal computers collected from respondents in Brazil, Germany, India, Japan, Spain, Turkey, and the United States.
Abstract: This article tests how well the information economics view of brand equity explains consumer brand choice in countries that represent different cultural dimensions. In this empirical analysis, the authors use survey and experimental data on orange juice and personal computers collected from respondents in Brazil, Germany, India, Japan, Spain, Turkey, and the United States. The results provide strong empirical evidence across countries for the role of brands as signals of product positions. In addition, the positive effect of brand credibility on choice is greater for consumers who rate high on either collectivism or uncertainty avoidance. Credible brands provide more value to collectivist consumers because such consumers perceive these brands as being of higher quality (i.e., reinforcing group identity). Credible brands provide more value to high-uncertainty-avoidance consumers because such brands have lower perceived risk and information costs.
TL;DR: The authors argue that emotional-branding strategies are conducive to the emergence of a doppelganger brand image, which is defined as a family of disparaging images and meanings about a brand that circulate throughout popular culture.
Abstract: Emotional branding is widely heralded as a key to marketing success. However, little attention has been given to the risks posed by this strategy. This article argues that emotional-branding strategies are conducive to the emergence of a doppelganger brand image, which is defined as a family of disparaging images and meanings about a brand that circulate throughout popular culture. This article's thesis is that a doppelganger brand image can undermine the perceived authenticity of an emotional-branding story and, thus, the identity value that the brand provides to consumers. The authors discuss how the tenets of emotional branding paradoxically encourage the formation and propagation of doppelganger brand imagery. This article develops the counterintuitive proposition that rather than merely being a threat to be managed, a doppelganger brand image can actually benefit a brand by providing early warning signs that an emotional-branding story is beginning to lose its cultural resonance. This articl...
TL;DR: In this paper, the authors address the issue of the significance and relative importance of the determinants of extension success by simultaneously investigating ten success factors and find that fit between the parent brand and an extension product is the most important driver of brand extension success, followed by marketing support, parent-brand conviction, retailer acceptance, and parent brand experience.
Abstract: The research presented in this article addresses the issue of the significance and relative importance of the determinants of extension success by simultaneously investigating ten success factors. The empirical analysis considers the direct relationships between success factors and extension success, the structural relationships among investigated factors, and moderating effects. The authors find that fit between the parent brand and an extension product is the most important driver of brand extension success, followed by marketing support, parent-brand conviction, retailer acceptance, and parent-brand experience. The authors also find several important structural relationships among the investigated success factors (e.g., marketing support → fit → retailer acceptance → extension success). Finally, the interaction terms of fit with the quality of the parent brand and with parent-brand conviction are statistically significant, albeit of relatively low importance.
TL;DR: In this article, the consumer's motivational orientation moderates the effect of the arousal produced by a store environment on the pleasantness of the environment, and the authors developed a conceptual framework that the consumer’s motivational orientation moderates the effect.
Abstract: Addressing inconsistent results in the literature, the conceptual framework that the authors develop proposes that the consumer’s motivational orientation moderates the effect of the arousal produced by a store environment on the pleasantness of the environment. Two experiments support the framework. When consumers have a recreational motivational orientation, high arousal has a positive effect on pleasantness, but when consumers have a task-oriented motivational orientation, high arousal decreases pleasantness. In addition, high arousal increases consumer intentions to visit and make purchases in the store for recreationally oriented consumers, but it has a negative impact on shopping behavior for task-oriented consumers. Pleasantness mediates the effect of arousal on shopping behavior.
TL;DR: In this paper, the authors show that using an avatar sales agent leads to more satisfaction with the retailer, a more positive attitude toward the product, and a greater purchase intention, while an attractive avatar is a more effective sales agent at moderate levels of product involvement.
Abstract: An impediment to Web-based retail sales is the impersonal nature of Web-based shopping. A solution to this problem is to use an avatar to deliver product information. An avatar is a graphic representation that can be animated by means of computer technology. Study 1 shows that using an avatar sales agent leads to more satisfaction with the retailer, a more positive attitude toward the product, and a greater purchase intention. Study 2 shows that an attractive avatar is a more effective sales agent at moderate levels of product involvement, but an expert avatar is a more effective sales agent at high levels of product involvement.
TL;DR: This paper examined how country characteristics systematically moderate the effects of individual-level drivers of the perceived value that consumers derive from visiting a brand manufacturer's Web site, and found that people who live in more individualistic countries give more weight to pleasure, to privacy/security protection, and to customization in their perceived value judgments than people from collectivistic countries.
Abstract: The authors examine how country characteristics systematically moderate the effects of individual-level drivers of the perceived value that consumers derive from visiting a brand manufacturer's Web site. They test hypotheses on data collected from 8886 consumers from 23 countries on three continents, involving 30 Web sites of the world's largest consumer packaged goods companies. They find that the effect of privacy/security protection on perceived value is stronger for people from countries with a weak rule of law, whereas people from countries that are high on national identity give more weight to whether there is cultural congruity between the site and themselves. People who live in more individualistic countries give more weight to pleasure, to privacy/security protection, and to customization in their perceived value judgments than people from collectivistic countries. The authors discuss implications for Web site design strategies.
TL;DR: In this article, the authors conduct an in-depth, longitudinal, multifirm investigation of firms that have successfully created a market orientation and develop a theoretical model to explain how firms create a market orientation.
Abstract: Market orientation is a foundation of marketing and is increasingly important in other fields, such as strategic management. Research in marketing has identified the characteristics of market-oriented organizations. However, how organizations change to become more market oriented has received less attention. In this article, the authors conduct an in-depth, longitudinal, multifirm investigation of firms that have successfully created a market orientation. Grounded by this in-depth understanding, they develop a theoretical model to explain how firms create a market orientation. The model identifies four path-dependent stages of change. In contrast to current conceptualizations, the authors find that creating a market orientation requires dramatic changes to an organization’s culture and the creation of organizationally shared market understandings. The findings offer new insights into how organizations develop a greater market orientation, organizational change, and the nature of market orientation, including the role of intraorganizational power and organizational learning in creating and sustaining a market orientation.
TL;DR: In this article, the authors provide a dynamic analysis of the simultaneous influence of cognition and affect in the satisfaction formation process, showing that the impact of cognition on the satisfaction evaluation increases and the influence of affect decreases over time.
Abstract: Despite the strong recognition that customer satisfaction should be viewed from a dynamic perspective, little is known about how the satisfaction judgment develops over time. Therefore, this study provides a dynamic analysis of the simultaneous influence of cognition and affect in the satisfaction formation process. The results of an experimental study based on a real consumption experience indicate that the impact of cognition on the satisfaction evaluation increases and the influence of affect decreases over time. Moreover, these effects are attenuated with inconsistent performance experiences. Finally, the study shows that the variance in customer satisfaction jointly explained by cognition and affect increases as experience accumulates.
TL;DR: In this article, a model that incorporates the main constructs from agency theory and organizational psychology was used to find a negative, direct effect of effort and a positive effect of job performance on job satisfaction.
Abstract: The objective of this article is to clarify ambiguities in the literature regarding the relationships among three key constructs of work relationships: effort, job performance, and job satisfaction. The relationship between job performance and job satisfaction is of central interest to research in organizational psychology. However, empirical research in that area finds that the link between these constructs is weak at best. A negative effect of effort on job satisfaction is consistent with agency theory, but there is limited empirical evidence to support this assumption. Moreover, some studies have found a positive effect of effort on job satisfaction. Using a model that incorporates the main constructs from agency theory and organizational psychology, the current study finds a negative, direct effect of effort and a positive, direct effect of job performance on job satisfaction. The authors show that conflicting findings in the literature are the result of inconsistency in both the measurement ...
TL;DR: The authors found that people who are motivated to touch because it is fun or interesting will also be persuaded by a communication that incorporates touch when they are able to make sense of how the touch is related to the message.
Abstract: Prior research has assumed that touch has a persuasive effect only if it provides attribute or structural information about a product. Under this view, the role of touch as a persuasive tool is limited. The main purpose of this research is to investigate the persuasive influence of touch as an affective tool in the absence of useful product-related information. The authors find that for people who are motivated to touch because it is fun or interesting, a communication that incorporates touch leads to increased affective response and increased persuasion, particularly when the touch provides neutral or positive sensory feedback. People who are not motivated to touch for fun will also be persuaded by a communication that incorporates touch when they are able to make sense of how the touch is related to the message. The authors explore the effectiveness of different types of touch in generating an affective response, and they replicate the effects on attitudes and behavior in a real-world setting. This research suggests that the marketing implications of touch are more substantial than previously believed. The authors present research implications for direct marketing, product packaging, point-of-purchase displays, and print advertising.
TL;DR: In this article, the authors find that cross-functional co-operation enhances a firm's customer and financial performance, and further show that this influence is mediated by market learning, indicating that performance returns to cross-function co-coopetition occurs through an underlying learning mechanism.
Abstract: Extant marketing literature tends to view cross-functional relationships as primarily cooperative or competitive in nature, but not both. In contrast, this research focuses on cross-functional “coopetition” (i.e., the joint occurrence of cooperation and competition across functional areas within a firm). Using responses from midlevel managers and top executives, the authors find that cross-functional coopetition enhances a firm’s customer and financial performance. The authors further show that this influence is mediated by market learning, indicating that performance returns to cross-functional coopetition occurs through an underlying learning mechanism.
TL;DR: In this article, the authors proposed a theory of consumer contamination, positing that consumers evaluate products previously touched by other shoppers less favorably, and test the theory by manipulating cues that increase the saliency that consumer contact has occurred.
Abstract: Although consumers like to touch products while shopping, the authors propose a theory of consumer contamination, positing that consumers evaluate products previously touched by other shoppers less favorably. The authors test the theory by manipulating cues that increase the salience that consumer contact has occurred. Furthermore, the authors investigate the role of disgust as the underlying mechanism of the theory.
TL;DR: In this paper, the authors propose a theoretical model that uses Kelman's underlying influence processes of internalization, compliance, and identification to identify the seller influence tactics that salespeople use and assess which of these tactics will resonate with three types of buyers: task-oriented buyers, interaction oriented buyers, and selforiented buyers.
Abstract: The adaptive selling literature identifies effective salespeople as those who match their influence tactics to suit the characteristics of buyers. However, prior research is largely silent on the specific influence tactics that salespeople use and the effectiveness of these tactics across different types of buyers. The authors propose a theoretical model that uses Kelman's (1961) underlying influence processes of internalization, compliance, and identification to identify the seller influence tactics that salespeople use and to assess which of these tactics will resonate with three types of buyers: task-oriented buyers, interaction-oriented buyers, and self-oriented buyers. The authors test their model with data from 193 bidirectionally matched buyer–seller dyads. The results strongly support the theoretical model and suggest that buyers are more complex than originally presumed. However, salespeople seem to recognize this complexity and use the combination of influence tactics prescribed by theo...
TL;DR: In this paper, a conceptual framework of roles in marketing relationships is developed, based on emerging theory from economic sociology and March's (1994) notion of decision "logics", which can be used both to create different relationship roles in the first place and to activate them over time.
Abstract: This article develops a conceptual framework of roles in marketing relationships. Drawing on emerging theory from economic sociology and March's (1994) notion of decision “logics,” the authors discuss two prototypical relationship roles, namely (1) a “friend,” who uses a “logic of appropriateness” and follows established rules, and (2) a “businessperson,” whose decisions are guided by utility-maximizing considerations under a “logic of consequences.” Next, they use extant theories of interfirm governance to suggest that firms' relationship strategies can be used both to create different relationship roles in the first place and to activate them over time. The authors posit that activation can have several different outcomes, including reinforcement of an existing dominant role or actual switching to a new one. Theoretically, the conceptual framework allows for integration of different perspectives on interfirm relationships, some of which have provided seemingly inconsistent accounts of firm beha...
TL;DR: In this article, the authors explored adoption as a dynamic process characterized by changing patterns, or diffusion, of consumer use of the innovation and found that consumers can experience strong emotions in the initial use of innovations.
Abstract: Innovation adoption is rarely a short process for consumers; accordingly, recent research has explored adoption as a dynamic process that is characterized by changing patterns, or diffusion, of consumer use of the innovation This research suggests that adoption is rarely a neutral process and that consumers can experience strong emotions in the initial use of innovations However, given such emotions, two opposing arguments can be made as to whether the inclusion of emotional responses increases the predictive power of traditional models of diffusion On the one hand, experienced emotion may simply be a function of gained benefits and, as such, may already be captured in extant models through cognitive assessments of net benefits On the other hand, and as data from two empirical and longitudinal studies demonstrate, the learning process is potentially emotion generating (independent of net benefits), and this emotion colors product evaluations The emotional influence is sizable and, importantl
TL;DR: In this article, the authors examine when and how ambient scents affect product evaluations, and predict that such scents can elicit emotional responses that can influence subsequent judgments, but only when specific conditions are met.
Abstract: This research examines when and how ambient scents (i.e., scents that are present in the environment and do not emanate from a specific product) affect product evaluations. Consistent with theory in environmental psychology, the author predicts that such ambient scents can elicit emotional responses that can influence subsequent judgments, but only when specific conditions are met. Three factors are hypothesized to moderate the effects of pleasant ambient scents on evaluations: (1) the congruence of the scent with the product, (2) the salience of the scent, and (3) consumers' motivation to correct for extraneous influences. The findings of three experiments suggest that as long as ambient scents are congruent with the product, they continue to affect consumers' evaluations, even when their influence becomes salient or when consumers are sufficiently motivated to correct for extraneous influences. In addition, as long as the scent is not completely incongruent with the product, noncongruent scents...
TL;DR: In this article, the authors find that the ratio of the sides of a rectangular product or package can influence purchase intentions and preferences and is related to marketplace demand, and that the impact of this ratio on consumers depends on the relative seriousness of the context in which the product is used.
Abstract: Consumers' reactions to rectangles have implications for package and product design. In two lab studies and an analysis of field data, the authors find that the ratio of the sides of a rectangular product or package can influence purchase intentions and preferences and is related to marketplace demand. In more exploratory inquiries, the authors also find that the impact of this ratio on consumers depends on the relative seriousness of the context in which the product is used. Furthermore, ratio can also affect product perceptions, and consumers appear to prefer a range of contiguous ratios for different contexts rather than a particular ratio.
TL;DR: In this paper, the first entrant in a new market has a difficult time surviving or do first-mover advantages provide protection from outright failure, and an empirical study of 264 new industrial product-markets yields insights into this controversial research topic.
Abstract: Does the first entrant in a new market have a difficult time surviving or do first-mover advantages provide protection from outright failure? This empirical study of 264 new industrial product-markets yields insights into this controversial research topic. The key data analysis insights arise through a comparison of survival risks in markets that were started with a really new product and in those that were started with an incremental innovation. When a pioneer starts a new market with a really new product, it can be a major challenge just to survive. In contrast, in markets started by an incremental innovation, market pioneer survival risks are much lower. Notably, early followers have the same survival risk across both types of markets. Overall, these results indicate that in markets started by a really new product, the first to market is often the first to fail. In contrast, in markets started by an incremental innovation, it appears that first-mover advantages protect the pioneer from outrigh...
TL;DR: In this paper, the authors examine the phenomenon of escalation bias in the context of managing new product introductions and identify three general paths (decision involvement inertia, decision involvement distortion, and belief involvement distortion) that can lead managers to escalate their commitments.
Abstract: In this research, the authors examine the phenomenon of escalation bias in the context of managing new product introductions In particular, they identify three general paths—Decision Involvement Inertia, Decision Involvement Distortion, and Belief Inertia Distortion—that can lead managers to escalate their commitments The authors test the relative strength of these paths in driving observed escalation behavior The results show that involvement with the initial decision, a key construct in numerous explanations for escalation behavior (eg, agency theory, self-justification), is not a necessary condition to induce commitment to a losing course of action (ie, escalation bias) Rather, the authors find that the driving force behind escalation behavior is improper use of initial positive beliefs in the face of negative new information This insight has implications for the groundwork necessary for organizations to design systems, policies, and procedures to help them avoid the trap of escalatio