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Making bad decisions can be contagious

November 11, 2009 |  9:30 am

People working in groups tend to become psychologically connected in a way that leads to less independent thinking and the tendency to buy into others' bad decisions, according to a new study.

Psychological research has long told us that people tend to honor their poor investments by escalating their level of commitment. For example, someone who buys a lemon of a car or a dilapidated house will, instead of owning up that it was a mistake and cutting their losses, continue to commit to the project and pour more money, effort and emotions into it.

OldHouse That also appears to happen in group settings, such as in families or workplaces. Researchers at Northwestern University conducted four experiments along three different contexts: financial investments, personnel decisions and auctions. They found decision-makers justified others' initial decisions and escalated their own level of commitment to these decisions "even in the face of direct financial costs to themselves, and even among economics students trained in the irrationality of honoring sunk costs."

The lesson in the study, published this month in the Journal of Experimental Social Psychology, is that it's wise to consult with an outsider when you're facing problems.

"It's true that insiders have more knowledge," the lead author of the study, Adam Galinsky, told ScienceNOW Daily News. "But when you are already down the road of a failed course of action, you really need ... a true outsider."

-- Shari Roan

Photo: Steve Osman / Los Angeles Times