POURING GOOD MONEY AFTER BAD: A COMPARISON OF ASIAN AND DEVELOPED COUNTRY MANAGERIAL DECISION-MAKING IN SUNK COST SITUATIONS IN FINANCIAL INSTITUTIONS

Recent currency and bond trading losses at Barings and Daiwa banks illustrate the willingness of managers to over-commit resources to a course of action in which sunk costs have been incurred and which by any rational standards should have been long discontinued. An international study of the determinants of managerial risk-taking is important because it sheds light on the extent to which aggressive decision-making reported in north American literature is prevalent elsewhere, and whether there are systematic differences between behaviours in different countries.