Session 55

Entrepreneurship and cognitions

Track K

Date: Tuesday, October 6, 2015


Time: 15:45 – 17:00


Room: Director's Row E

Session Chair:

  • Tim R. Holcomb, Miami University

Title: A Motivated Account of Entrepreneurial Action: Confidence Judgments and Expectancy Conditions in Judgmental Decision-Making


  • Tim R. Holcomb, Miami University
  • Michael Holmes, Florida State University
  • Peter Klein, Baylor University
  • Duane Ireland, Texas A&M University

Abstract: Entrepreneurs make decisions in uncertain environments where they face constraints on their ability to construct and evaluate judgments. In this paper, we characterize the timing when a decision to act is most likely based primarily on when entrepreneurs are sufficiently confident in judgments they form about a given entrepreneurial decision context. This “sufficiency threshold” captures the tradeoff between cognitive efficiency and judgmental task goals, and the negative discrepancy between actual and sufficient confidence drives demands in cognitive effort for continued judgmental reasoning. Commitment of that effort, however, depends importantly on expectancies they hold about whether continued reasoning will produce judgments in which they are sufficiently confident. We develop our arguments within a rich theoretical framework that characterizes the effects of doubt on reasoning and contributes to a deeper and more comprehensive understanding of important behavioral conditions in the examination of entrepreneurial action when entrepreneurs make judgments and decisions.

Title: How New Ventures' Strategies Emerge: Understanding Founders'Shared Beliefs Prior to Start Up


  • Anneleen Van Boxstael, Ghent University

Abstract: A growing body of research is drawing attention to pre-founding experiences that shape an entrepreneur’s initial strategic choices. We combine an ethnographic study at a newly formed technology venture with in-depth analysis of the 3016-page communication log between the new venture founding team members during the entire founding process. We show that shared beliefs at start up result from insights from the community with which the founders identify prior to venture founding. The founders’ community experiences help them identify an innovative entrepreneurial opportunity in a traditional industry. We further show that their community-induced beliefs entrench the room to experiment and imitate after founding, yet, simultaneously create team stability during the turbulent founding stage.

Title: Motivations, Creativity and Entrepreneurial Activities


  • Maria Halbinger, City University of New York

Abstract: This study applies a psychology lens on the notion of entrepreneurship as a process in which individuals discover and exploit opportunities, i.e. firm foundation and other implementation forms. To increase our understanding of why there are fewer entrepreneurs than opportunities, it theorizes that intrinsic and extrinsic motivation and creativity are important for different entrepreneurial activities. Drawing on data of entrepreneurially active individuals from hacker- and makerspaces across the globe, findings show a positive influence of creativity across all entrepreneurial activities. In contrast, results suggest that while intrinsic motivation matters in early process activities, it is detrimental at later process points and extrinsic motivation is required to exploit opportunities and become an entrepreneur, thereby providing an explanation of why not all opportunities translate into entrepreneurship.

Title: The Impact of Overconfidence on Entrepreneurial Entry, Learning, and Exit


  • John Chen, University of Florida
  • David Croson, Southern Methodist University
  • Daniel Elfenbein, Washington University-St. Louis

Abstract: We argue that excess entry and delayed exit in entrepreneurship (traditionally studied separately) are integrally related because they result from a common underlying learning process: entrepreneurs’ ongoing estimation of their likelihood of success. Our work integrates these two literatures using an agent-based computational model wherein entry and exit decisions result from entrepreneurs’ learning experience both before and after entry. Conclusions include that (1) optimal actions lead to overoptimistic entrant populations who delay exit in the face of negative information, (2) overoptimism is costly, associated with more entry errors, higher failure rates, greater exit delay among unprofitable firms, and lower average profits of entrants, and (3) over-precision (excessive confidence that one’s beliefs are accurate) interacts with optimism in surprising and non-obvious ways, sometimes to entrepreneurs’ benefit.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 10: Entrepreneurship in Base-of-the-Pyramid Markets
Sun: 09:45 – 11:00
Session 11: Crowdfunding Research: Present and Future
Sun: 11:15 – 12:30
Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
Sun: 16:15 – 17:30
Session 50: Entrepreneurship and Institutional Environment
Sun: 17:45 – 00:00
Session 319: Entrepreneurship and Strategy Business Meeting
Mon: 08:00 – 09:15
Session 56: Family firms
Mon: 11:15 – 12:30
Session 119: Competition and entrepreneurial entry
Mon: 13:45 – 15:00
Session 53: New forms of entrepreneurial funding
Session 97: Accelerators, corporate VCs and new venture creation
Mon: 16:45 – 18:00
Session 59: Entrepreneurship in emerging markets
Session 98: Culture, institutions and entrepreneurship
Tue: 08:00 – 09:15
Session 54: Venture capital and angel financing
Session 118: Entrepreneurial orientation and strategic entrepreneurship
Session 217: Leadership and Governance in Family Firms
Tue: 11:00 – 12:15
Session 51: Academic entrepreneurship
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 120: Creativity, knowledge spill overs and a venture's legitimacy
Tue: 15:45 – 17:00
Session 52: Entrepreneurial business models
Session 55: Entrepreneurship and cognitions
Tue: 17:30 – 18:45
Session 57: Entrepreneurial teams
Session 99: Governance and entrepreneurial finance

Strategic Management Society