The Effects of Self-Efficacy on Behavior in Escalation Situations

Two experiments were conducted to investigate the hypothesis that perceptions of self-efficacy influence, in various ways, behavior in escalation situations. Self-efficacy beliefs for finding oil were measured for 527 petroleum geologists as they decided, at increasing levels of negative feedback in the form of dry wells, whether to persist with an unproductive venture in petroleum exploration. Experiment 1 employed a within-subject design and found a significant main effect of both negative feedback and initial self-efficacy. Differences in intentions to escalate between low and high self-efficacy individuals were apparent at all levels of negative feedback. No moderating effect of self-efficacy, however, was discernible. Experiment 2 employed a between-subjects design and multiple regression analysis. Like Experiment 1, Experiment 2 revealed a significant main effect of negative feedback and initial self-efficacy. Post-feedback self-efficacy was found to mediate the effects of negative feedback on the escalation tendency. Implications of these results for the self-efficacy and escalation literatures are discussed.