Insights into the Psychological Profiles of Entrepreneurs
Posted: 13 Jul 2010 Last revised: 14 Jul 2010
Date Written: July 13, 2010
Entrepreneurs derive lower risk-adjusted returns than non-entrepreneurs, but are compensated through non-pecuniary benefits. This paper reports on findings from survey evidence. The main findings are as follows: A key non-pecuniary benefit to entrepreneurs is achieving greater control over their working environment. Doing so leads entrepreneurs to report achieving higher affect and well being than non-entrepreneurs. Entrepreneurs report that they are more skilled socially than non-entrepreneurs. This might provide a partial explanation for why entrepreneurs have a higher marriage rate and larger families than non-entrepreneurs. Entrepreneurs exhibit greater dispositional optimism than non-entrepreneurs. However, in the study sample, the difference is not statistically significant. In terms of preference for lottery-like outcomes, entrepreneurs find prospects offering high returns with low probability attractive, but regard control of their environment as more important than the preference for positive skewness.
Keywords: entrepreneurship, entrepreneurs, optimism, desirability of control
JEL Classification: M13, G11, G00, G32, D03
Suggested Citation: Suggested Citation