Escalation of commitment in troubled IT projects: Influence of project risk factors and self-efficacy on the perception of risk and the commitment to a failing project

Past studies have indicated that project managers may be less likely to continue failing IT projects if they are able to perceive project risks accurately. Using the scenario of a failing IT project, a computer simulation-based experiment investigated the influence of individual self-efficacy and project risk factors on the perception of risk. Participants played the role of a project manager and managed a simulated IT project. The results suggest that project managers are likely to underestimate the risks of a project with endogenous risk factors as compared to a project with exogenous risk factors. Results of this study point to a ‘self-efficacy bias’ where project managers with higher self-efficacy may underestimate the risks of a troubled IT project as compared to project managers with lower self-efficacy. Further, risk perception mediated the influence of self-efficacy on the commitment to a failing IT project.