In a famous football game between Princeton and Dartmouth in 1951, scientists confirmed the existence of alternative realities. The football game itself was unusually rough with both quarterbacks leaving the game early. The Princeton quarterback, who had recently been featuredonthe cover of Time magazine, left with a broken nose, while Dartmouth’s quarterback was taken out of the game with a broken leg. Incensed, both teams pulled no punches, and fans were enraged by the foul play. Observing the ruckus, researchers decided to ask students at each school to report the number of infractions committed by the opposing team. An interesting phenomenon emerged. Princeton students seemed to think that the Dartmouth team was at fault, and Dartmouth students seemed to think that the Princeton team was at fault. In the end, with such dramatically different perceptions of the same event, the researchers sarcastically concluded that perhaps there had been two different football games - two alternative realities.
The Dartmouth-Princeton football game highlights how powerful motivation can be in shaping how we see the world, as well as how we learn. In economics, the motivation trap is known as the problem of sunk costs and similarly leads to irrational decision making. To illustrate, consider the following problem: you are 90% of the way to completing a new airplane when the news breaks that a competitor has beat you to market with a faster, cheaper, better version of the same plane. What do you do? In the abstract, most people choose the economically rational choice - abandon the project. However, when motivation (in the form of money) gets involved - when participants are told they have already invested $9M and for only $1M can finish the project - suddenly the percentage of people choosing to pursue the doomed project jumps from 18% to 85%!Similarly, researcher Barry Staw found in an experiment, that when managers were faced with the decision to allocate funding between divisions on a research & development project, managers actually allocated immense amounts of capital to failing divisions that were losing money when they felt responsible for the original investment decision.
The motivation bias can be particularly dangerous for entrepreneurs and innovators because entrepreneurs and innovators often have so much skin in the game. When an entrepreneur stakes his or her hopes, dreams, and reputation on a startup, it can be a powerful motivating force. However, that same motivation can make it all but impossible for the entrepreneur to learn in an intellectually honest way and make needed course corrections.
(See Nail It Then Scale It, pgs. 47-48)