Overoptimism Among Founders: The Role of Information and Motivation

27 Pages Posted: 9 Apr 2008

See all articles by I. Verheul

I. Verheul

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Martin A. Carree

University of Maastricht - Department of Organization & Strategy

Date Written: March 2008 3,

Abstract

This study empirically investigates factors that influence overoptimism across nascent entrepreneurs. We distinguish between two main groups of determinants (information, motivation) and three types of overoptimism (income, psychological burden, leisure time). Findings indicate that entrepreneurs who have relevant business information are more realistic and that entrepreneurs with a high level of general knowledge, acquired through education or previous (unrelated) entrepreneurial experience, are more overoptimistic. External advice and business planning do not appear to limit subsequent overoptimism. Entrepreneurs are less overoptimistic about the pecuniary or non-pecuniary benefits of self-employment when these benefits are closely related to the initial motivation for starting up the business.

Keywords: overoptimism, nascent entrepreneurs, information, motivation

JEL Classification: M13, O32, M

Suggested Citation

Verheul, Ingrid and Carree, Martin A., Overoptimism Among Founders: The Role of Information and Motivation (March 2008 3,). ERIM Report Series Reference No. ERS-2008-008-ORG. Available at SSRN: https://ssrn.com/abstract=1117785

Ingrid Verheul (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burgemeester Oudlaan 50
3062 PA Rotterdam, NL 3062 PA
Netherlands
+31 10 4081398 (Phone)
+31 10 4089146 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Martin A. Carree

University of Maastricht - Department of Organization & Strategy ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

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