When Having Free Choice Is Harmful

Abstract: Decision-makers tend to commit to a course of action despite negative feedback ( escalating commitment), especially if they made the initial decision themselves. However, studies with repeated decisions have shown that this choice effect is unreliable. One explanation might be that simple-choice situations lead to less intensive elaboration of initial preferences. Therefore, in this experimental study, two choices of different complexity were introduced and their effects as well as the moderating effect of need for cognition (NFC) on escalation of commitment were analyzed. Participants ( N = 152) engaged in a stock market simulation game, managing a portfolio that was either assigned or freely chosen. After primarily negative feedback, participants repeatedly decided whether to keep or sell the portfolio. Overall, free choice resulted in longer holding periods, especially with complex choice. Furthermore, complex choice had a stronger effect on holding periods for participants with high NFC than for those with low NFC.