Escalation of commitment involves the following sequence of steps:
(a) Occurrence of loss
(b) Self-Justification
(c) Strengthening by external factor
(d) Rational expectation of positive outcome
Choose the correct option:

Correct option is B

Escalation of commitment follows a predictable psychological sequence. It begins with (d) rational expectation of positive outcome where initial decisions are made with optimistic forecasts. This is followed by (a) occurrence of loss when reality contradicts expectations. Subsequently, (b) self-justification mechanisms activate to protect ego and rationalize continued investment. Finally, (c) strengthening by external factors such as social pressure, sunk costs, or organizational norms reinforce the commitment despite negative feedback, completing the escalation cycle.

Information Booster:
● Escalation of commitment: Tendency to persist with failing courses of action due to psychological and social pressures
● Rational expectation: Initial optimistic forecasting that sets up the commitment trap
● Self-justification theory: Cognitive dissonance reduction through rationalizing continued investment
● Sunk cost fallacy: Past investments bias future decisions despite diminishing returns
● External factors: Include organizational culture, peer pressure, and public commitments that intensify escalation
● Relevant to organizational behavior, decision-making errors, and behavioral economics