Ask HN: Some wise words on 'escalation of commitment'

I've seen 'escalation of commitment' in many startups leading to failure. This means the management/investors see confirmation of their strategy/product/market/technology in rejection and gets more committed instead of less, sometimes beyond the point of no return, pushing the company over the edge of the cliff. http://en.wikipedia.org/wiki/Escalation_of_commitment. Have you experienced this yourself or in your company? What happened? How to break the cycle? This is extremely important for entrepreneurs to understand and be able to deal with.