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The perils of acting rashly: Risk-taking propensity impeding emotion-based learning in entrepreneurs
[Les dangers de l’audace: La propension à prendre des risques entrave l’apprentissage basé sur les émotions chez les entrepreneurs]

Author

Listed:
  • Gian Seloni

    (Universitas Gadjah Mada)

  • Sri Kusrohmaniah

    (Universitas Gadjah Mada)

  • Galang Lufityanto

    (Universitas Gadjah Mada)

Abstract

Errors are common in the entrepreneurial world, but the ability to learn from past mistakes can separate successful entrepreneurs from the rest. On the other hand, it has been demonstrated that the average population can anticipate future problems based on emotional signals elicited from past experience—a capacity known as emotion-based learning. The present research was aimed at examining emotion-based learning while also incorporating risk-taking predisposition (RTP) as an additional measurement among entrepreneurs using Iowa gambling task (IGT). Participants were instructed to pick cards from a deck, and each card either awarded or subtracted points. While performing this task, participants’ skin conductance response (SCR) was recorded to examine subtle emotional signals. The sample of entrepreneurs involved in our study showed worse IGT performances than those in the control group. This was similar to findings in a previous study (Muehlfeld et al., Entrep Theory Pract 41:533–565, 2017) that surmised that the typical behavior was simply due to exploring all opportunities that eventually had significant cost to participants. Here, we extend the explanation that the SCR measurement supported emotion-based learning, indicating that our participants were aware of the potential risks of the IGT. Furthermore, entrepreneurs’ RTP could explain the incompatibility between physiological and behavioral outcomes. Entrepreneurs seemed to ignore the bodily-emotional signals, perhaps tempted by a particular card deck’s gain/loss ratio, which eventually led to significant losses. This study illuminates the interplay between risk-taking propensity, physiological markers of emotion, and performance in a game scenario that simulates decision-making in an ambiguous environment.

Suggested Citation

  • Gian Seloni & Sri Kusrohmaniah & Galang Lufityanto, 2023. "The perils of acting rashly: Risk-taking propensity impeding emotion-based learning in entrepreneurs [Les dangers de l’audace: La propension à prendre des risques entrave l’apprentissage basé sur l," Journal of International Entrepreneurship, Springer, vol. 21(1), pages 89-110, March.
    • Handle: RePEc:kap:jinten:v:21:y:2023:i:1:d:10.1007_s10843-022-00325-y
    DOI: 10.1007/s10843-022-00325-y
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    References listed on IDEAS

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    1. Hamid Etemad, 2023. "The increasing prevalence of multi-sided online platforms and their influence on international entrepreneurship: The rapid transformation of entrepreneurial digital ecosystems," Journal of International Entrepreneurship, Springer, vol. 21(1), pages 1-30, March.

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