Abstract
Are entrepreneurial-oriented individuals different from others in their propensities to take risk and uncertainty? Entrepreneurial-oriented individuals are defined as individuals that show entrepreneurial intentions - the cognitive state that precedes the decision to form a new venture. Cognitive theory suggests differences in risk taking due to individual characteristics. However, entrepreneurship theory did not provide empirical support for such differences. Using data from a laboratory experiment with simple money games, we observe how individuals from two different groups (entrepreneurial-oriented, non-entrepreneurial-oriented) react to different degrees of risk and uncertainty when real monetary incentives are involved in each decision. The analysis reveals significant differences between entrepreneurial and non-entrepreneurial-oriented individuals in their decision making. In particular, entrepreneurial-oriented individuals appear to be more sensitive towards a “house money effect” (increased risk seeking in the presence of a prior gain) and less sensitive towards a “risk propensity effect” (reduced risk avoidance in the presence of increasing degrees of risk). These results have fundamental implications for the understanding of cognitive factors guiding entrepreneurial decision-making.
Original language | English |
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Publication date | 2015 |
Number of pages | 16 |
Publication status | Published - 2015 |
Event | DRUID Academy Conference 2015 - Hotel Comwell Sport Rebild Bakker, Aalborg, Denmark Duration: 21 Jan 2015 → 23 Jan 2015 Conference number: 36 http://druid8.sit.aau.dk/druid/registrant/index/login/cid/17 |
Conference
Conference | DRUID Academy Conference 2015 |
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Number | 36 |
Location | Hotel Comwell Sport Rebild Bakker |
Country/Territory | Denmark |
City | Aalborg |
Period | 21/01/2015 → 23/01/2015 |
Internet address |