An Examination of the Role of Opportunity Cost and Opportunity Value in New Venture Creation
Frontiers of Entrepreneurship Research 2007
16 Pages Posted: 6 Dec 2007
Why do entrepreneurs pursue opportunities when others do not? Differences between entrepreneurs and the general population have been found in relation to various cognitive biases, and these biases have been found to affect risk perception, and the decision to pursue opportunities. A pilot study showed entrepreneurs focused more on potential value, while non-entrepreneurs focused on cost. This paper seeks to extend existing theory by proposing a mediated model whereby opportunity cost and opportunity value mediate the relationship between cognitive biases and risk perception on the one hand, and the decision to pursue an opportunity on the other hand.
JEL Classification: M13
Suggested Citation: Suggested Citation