The Effect Of Need For Cognitive Closure And Regret On Escalation Of Commitment

Escalation of commitment is an important and universal psychological phenomenon in the decision-making psychology and behavioral finance. It refers to the phenomenon whereby, in the face of the failture consequences, the decision makers still decided to continue to invest in the previous action, it poses a challenge to the rational decision maker assumption—previous behavior should not affect future decision. Previous studies were from the three influential theories to explore the psychological mechanism of escalation of commitment,namely self-justification theory, prospect theory and decision dilemma theory. It has been demonstrated to be influenced by the initial responsibility, mental account, situational factors and individual differences. However, research on regret—the most important emotional factors in decision-making,is the relative lack of empirical research, while the only research also face the status of different conclusions. Need for cognitive closure reresents the individual differences in information processing and retrieval, the study on it will deepen our understanding of this special psychological phenomenon. This article attempts to explore the impact of regret and need for cognitive closure on escalation of commitment.With the method of results feedback to agitate anticipated regret,study 1 takes waiting for a bus in real life as the decision-making task, by measuring individual difference of need for cognitive closure to explore the impact of both on escalation of commitment. The results indicate that anticipated regret and the need for cognitive closure have significant impact on escalation of commitment as well as a significant interaction between them. Relative to the low cognitive closure, high cognitive closure subjects are more vulnerable to the impact of anticipated regret. Study 2 takes the same scenario with study 1 as the decision-making task to investigate the impact of experienced regret and need for cognitive closure on escalation of commitment. The results indicate that the escalation-related regret have significant impact on escalation of commitment, the escalation-unrelated regret is no significant difference with the control group. Meanwhile, need for cognitive closure have main effect on escalation of commitment, as well as a significant interaction effect. Relative to the low cognitive closure, high cognitive closure subjects are more vulnerable to the impact of experienced regret.Finally, the limitations of the present research and the future research directions were also discussed.