In this article,
we explore the extent to which decision makers actually perceive negative feedback as
indicative of a problem and howthis influences their decision to escalate. Although problem
recognition and cognitive biases have been intensively studied individually, little is
known about their effect on escalation behavior. In this research, we construct and test an
escalation decision model that incorporates both problem recognition and two cognitive
biases: selective perception and illusion of control. Our results revealed a significant
inverse relationship between problem recognition and escalation