The commitment bias in action:
Posted: Mon Dec 23, 2024 4:44 am
A company wants to bring a new product to market, but it doesn't really catch on. Over time, when other specialists join the team who want to go in a different direction, it is difficult for the originators to change course and admit that the original idea might not be such a success after all. The sunk cost fallacy (Arkes & Blumer, 1985) is very similar to this.
A charity salesman asks you on the street if you think nature is important. Utterly, you answer "Yes. Then he asks if you would like to become a donor to the charity that does a lot for nature. Now, of course, you can't say no.
Despite the fact that a software builder keeps iran code phone failing to live up to its commitments and does not appear to have necessary in-house knowledge to develop important features needed to grow, a company still remains a customer.
Using commitment bias to your advantage
Prevent commitment bias from getting in the way of your business decisions; instead, use it to your advantage:
Make a potential customer make small commitments all the time. This will make him more and more inclined to take the big step as well. For example, give away a free sample, or as a software company, a free trial period.
For business decision, always look at the numbers and determine in advance what they should be. This will give you an edge over most competitors who will continue to bet on failed projects.
Split large investments into smaller, phased steps. This makes it easier to evaluate and adjust progress while still committing the team to the end goal.
Resources
Arkes, H. R., & Blumer, C. (1985). "The psychology of sunk costs." Organizational Behavior and Human Decision Processes, 35, 124-140.
A charity salesman asks you on the street if you think nature is important. Utterly, you answer "Yes. Then he asks if you would like to become a donor to the charity that does a lot for nature. Now, of course, you can't say no.
Despite the fact that a software builder keeps iran code phone failing to live up to its commitments and does not appear to have necessary in-house knowledge to develop important features needed to grow, a company still remains a customer.
Using commitment bias to your advantage
Prevent commitment bias from getting in the way of your business decisions; instead, use it to your advantage:
Make a potential customer make small commitments all the time. This will make him more and more inclined to take the big step as well. For example, give away a free sample, or as a software company, a free trial period.
For business decision, always look at the numbers and determine in advance what they should be. This will give you an edge over most competitors who will continue to bet on failed projects.
Split large investments into smaller, phased steps. This makes it easier to evaluate and adjust progress while still committing the team to the end goal.
Resources
Arkes, H. R., & Blumer, C. (1985). "The psychology of sunk costs." Organizational Behavior and Human Decision Processes, 35, 124-140.