“Oh! Ahab,” cried Starbuck, “not too late is it, even now, the third day, to desist. See! Moby Dick seeks thee not. It is thou, thou, that madly seekest him!” In my copy, these lines appear on page 599 of a 604 page book. Ahab is behaving the way we expect literary characters to behave at the end of a book; he is going to keep on pressing until there is some kind of dramatic resolution one way or the other. Starbuck is reminding him that just because it’s page 599 doesn’t actually mean anything; there is nothing objective about the situation that prevents Ahab from coming to his senses, turning the ship around, and taking everybody home.
I'll admit that I've run my life in part so that it can be told as a heroic story, with myself as the gallant hero of course. And while the story of my utter defeat might be dramatic, I'll prefer other dramatic outcomes.
Stuart, the dramatic outcomes aren't necessarily simpler in any sense except that they conform well with simple (and salient) archetypes. If a certain archetype, like "victory", is seen as inherently positive or negative, it can be used as a heuristic shortcut to needing to know the details, but the details can be just as complicated. I suppose it's only a terminological issue, but I wouldn't call this "simplicity bias".
But total failure - Ahab turning the ship around, giving up, spending the rest of his life crushed by his defeat - is also a dramatic outcome, but one that we instinctively reject.
Dramatic outcomes are simple stories, easy to understand, causing instant judgment calls from people. We can accept and reject simple, dramatic stories without having to examine all the details. "We win" - good, no need to know more. "We lose" - bad, no need to know more.
But "we compromise" - that's not something people can just accept or refuse. The whole point is in the details; we need to know everything about it, and the only decision we can make is an informed one (apart from those who again try to change that story into the simple "we win" or "we lose").
I suspect it's more of a simplicity bias, or (more likely) leaders playing to the simplicity biases of their relevant audiences. The true test might be in the past - have most (or many) leaders acted out their dramatic roles? Or, in hindsight, were there valid political reasons for why they did what they did?
We often act in order to create a more favorable self-image. Acting in such a way as to become a literary character might be irrational in terms of actual outcome for our actual self, but a favorable outcome for our self-image. In some cases getting a dramatic self-image might be a powerful form of signalling ("he is a real Ahab" might help signal an extreme level of determination). In other cases maybe the self-image is parasitic: maybe the persona is trying to become a meme and using the real person as a jump-off point (or it was already infected by a meme of acting dramatically, which makes people act in a salient manner so that other people copy them).
Well, it could be explained by salience bias, which salience comes from the preference. I mean, if two sides thinking only about dramatic resolutions were presented with a good in-between path (not necessarily a compromise) they might agree to it quite often, and if the reason they didn't think of it is because the more dramatic options were more salient, then I'd say we'd have a clear case of bias (as a result of the preference). Whether it's a bias hinges on whether people would still prefer the dramatic resolution when made aware of the more mundane one. I suspect they simply don't think of it, though.
You could call this a bias toward dramatic outcomes, our you could say we have a preference for being the heroes of dramatic stories. The preference explanation makes more sense to me.