Antecedents of Entrepreneurial Decision-Making: Prediction and Control Oriented Strategies

27 Pages Posted: 3 May 2014

See all articles by Graciela Kuechle

Graciela Kuechle

Batten Institute for Entrepreneurship and Innovation; Heilbronn University

Béatrice Boulu-Reshef

Université d'Orléans

Sean Carr

University of Virginia - Darden School of Business

Date Written: January 15, 2014

Abstract

The economics-related prediction strategies and the effectuation-related control strategies are two main competing hypotheses of how entrepreneurs deal with uncertainty in theories of entrepreneurship. In an experimental test, we study the conditions under which prediction and control strategies lead subjects to make a risky bet in ambiguous environments. Individuals who use predictive methods to gain information and mitigate risks are more likely to accept the bet after receiving bad news as compared to those who used control methods. These results revert in the presence of good news. We discuss the theoretical implications of the results for theories of entrepreneurship.

Keywords: Entrepreneurship, Uncertainty, Effectuation, Experimental economics, Theories of entrepreneurship

Suggested Citation

Kuechle, Graciela and Boulu-Reshef, Béatrice and Carr, Sean, Antecedents of Entrepreneurial Decision-Making: Prediction and Control Oriented Strategies (January 15, 2014). Darden Business School Working Paper No. 2431953, Available at SSRN: https://ssrn.com/abstract=2431953 or http://dx.doi.org/10.2139/ssrn.2431953

Graciela Kuechle (Contact Author)

Batten Institute for Entrepreneurship and Innovation ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Heilbronn University ( email )

Max-Planck-Str. 39
Heilbronn, BW 74081
Germany

Béatrice Boulu-Reshef

Université d'Orléans ( email )

Rue de Blois
Orléans, 45000
France

HOME PAGE: http://www.beatrice-boulu-reshef.info/

Sean Carr

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4812 (Phone)

HOME PAGE: http://www.batteninstitute.org

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