An Examination of the Role of Opportunity Cost and Opportunity Value in New Venture Creation

Babson College Entrepreneurship Research Conference (BCERC) 2007

Frontiers of Entrepreneurship Research 2007

16 Pages Posted: 6 Dec 2007

Abstract

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.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation

Zane, Lee J. and De Carolis, Donna Marie and DiRenzo, Marco S., An Examination of the Role of Opportunity Cost and Opportunity Value in New Venture Creation. Babson College Entrepreneurship Research Conference (BCERC) 2007, Frontiers of Entrepreneurship Research 2007, Available at SSRN: https://ssrn.com/abstract=1060281

Lee J. Zane (Contact Author)

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Donna Marie De Carolis

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Marco S. DiRenzo

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

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