Entrepreneurial Risk and Market Entry: An Office of Advocacy Working Paper

摘要

Entrepreneurs, by their nature, are risk takers. The authors of this study suggest that there are two forms of uncertainty in entrepreneurial ventures: (1) uncertainty regarding market demand, and (2) uncertainty regarding one's own entrepreneurial ability. They further propose that entrepreneurs display risk aversion with respect to demand uncertainty, but exhibit overconfidence or 'risk seeking' with respect to ability uncertainty. To examine this view, the authors model the entrepreneur's entry decision. The research shows that entrepreneurs, while risk-averse in their role as risk-bearers, are willing to bear economic risk when overconfidence compensates for their aversion.