The Role of Theory in Testing Hypothesized Interactions: An Example from the Research on Escalation of Commitment1

Theory should guide the choice of analytic strategy in testing research hypotheses. This thesis is developed primarily with respect to the testing of interaction hypotheses, with some discussion of the implications for testing hypotheses regarding main effects. Previously published data on the escalation bias (Schoorman, 1988) are re-analyzed using planned contrasts, two-way analysis of variance (ANOVA), and regression analyses using dummy and effect coded variables, with both simultaneous and hierarchical entry. Each analysis yields different results, which demonstrates that different analytic strategies can lead to conflicting interpretations regarding the theory of interest. The reasons for these differences and the implications of these findings for the choice of analytic strategies are discussed.