What do you want to be when you grow up?
As a kid, that was my least favorite question. I dreaded conversations with parents and other adults because they always asked it — and no matter how I replied, they never liked my answer.
When I said I wanted to be a superhero, they laughed. My next goal was to make it to the NBA, but despite countless hours of shooting hoops, I was cut from basketball tryouts three years in a row. In my first semester of college, I decided to major in psychology, but that didn’t open any doors — it just gave me a few to close.
Another example: Evidence shows that entrepreneurs persist with failing strategies when they should pivot. Sunk costs are a factor, but the most important causes appear to be psychological rather than economic.
Escalation of commitment happens because we’re rationalizing creatures, constantly searching for self-justifications for our prior beliefs as a way to soothe our egos, shield our images and validate past decisions. And it is a major factor in preventable failures.
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