Duke Nukem Forever: Escalating Commitment and Chewing Bubblegum [The Psychology of Video Games, Dec. 30]
Why did Duke Nukem Forever stay in production for so long? More to the point, why did some employees at the game's developers, 3DRealms, stay committed to the project for so long in the face of unlikely payoffs and irreparable harm to their careers? Would you have?
Before we answer, let me present you with another question: would you pay $10 for a $1 bill? No? Under the right conditions you might, and many of the folks at 3D Realms did basically that because of a psychological phenomenon called "escalation of commitment."
Consider an auction where a $1 bill is up for bid and the rules are (and this is the important part) that everyone who bids has to cough up their last bid whether they win or lose. Even when this is clearly explained to a room full of MBA students who should know better, someone always springs the trap by throwing out a bid of 1 penny in hopes of an easy $.99 profit.
Invariably someone else jumps on the bandwagon and outbids the first person, raising the stakes to two cents and a $.98 profit. But now the first person must either bid three cents or let the other person win and lose his initial 1 cent bid.
But people really hate losing money, so the second bidder is pretty likely to raise his bid to 4 cents, and the spiral keeps spinning until the break-even point of $1.00. Now one sheep-faced bidder has to decide whether or not to actually keep raising the bid and face a 1 cent loss even if he wins. Much of the time he will actually do it, presenting his opponent with basically the same conundrum.
Researchers running this experiment with groups of otherwise rational adults and had final prices go up to ten or even twenty dollars for a one dollar bill. The reason is that bidders escalate their commitment to the auction by citing prior investments as justification for future ones, even though those costs are gone, immutable, and completely out of the picture. Think of it this way: should you invest even one more cent on an auction that will only cause you to lose money even if you "win?" Or is it more rational to just cut your losses and bow out?
This is basically what many folks at 3D Realms did with Duke Nukem Forever. According to that Wired article, the developers constantly threw money at the game, citing past expenses as the reason for continuing to invest money even when it was apparent that the game was doomed. And since they were self-funding the game, it wasn't until the very end that they had a publisher standing over them and forcing them to end the cycle and either kill the game or polish it off for release.
- Jamie Madigan 