A Measure Of Entrepreneurial Risk Preference And Optimism Using Field Experiments

Previous studies have underscored the economic importance of the role of the entrepreneur, and empirical studies testing the nature of the entrepreneur are notably lacking. This study directly addresses this issue by examining newly gathered field data which captures the decision making and risk behaviors for a group of high-technology entrepreneurs. Two decision making tasks were used to elicit risk aversion measures and to test for any 'joy of winning' or judgmental errors, possibly in the form of over optimistic behavior. These elicitations were made with the use of multiple price formats and winner's curse experiments. 62 responses were collected from subjects at the 2004 national Small Business Innovation Research (SBIR) conference in Atlanta, March 2004. From these 62 responses a subject pool of 33 entrepreneurs and 29 non-entrepreneurs were identified. Statistical methods were employed to assign risk aversion measures and identify any 'joy of winning' or judgmental errors for the entrepreneur (treatment) group compared with the non-entrepreneur (control) group. Findings show that entrepreneurs exhibit less risk aversion, but show no statistically meaningful difference in judgmental errors compared to their non-entrepreneur counterparts. However, there is evidence to support the claim that both entrepreneurs and non-entrepreneurs exhibit a 'joy of winning', and that the size of the effect is larger for entrepreneurs.

Author dc:creator

• Schneider, Mark

Contributors dc:contributor

• Elston, Julie

• Entrepreneurship
• Experimental Economics
• Risk Aversion
• Winner's Curse
• Entrepreneur
• Joy of Winning
• Economics

Language dc:language

English

Identifier

CFE0000549

OAI identifier oai:identifier

oai:stars.library.ucf.edu:etd-1387