Entrepreneurial start-ups suffer notoriously high rates of business failure. Previous research has focused on two explana-tions for excess entry in entrepreneurial markets: psychological and statistical. Psychological explanations attribute excess entry to entrepreneurial overconfidence and competition neglect. Statistical explanations focus on random judgmental errors made by boundedly-rational entrepreneurs attempting to estimate business opportunities in uncertain markets. We conducted an experiment that distinguished entrepreneurial markets from other types of markets, and tested psychological and statistical hypotheses for all market types. Our results show that excess entry is significantly greater in entrepreneurial markets than in other market types, and that both confidence and fallible judgment play significant roles in explaining market entry.
Join us for light refreshments (coffee/tea and biscuits) before the Forum at 2.15 p.m.
This event is free and open to public: go.warwick.ac.uk/draw