Exploiting opportunities at all cost? Entrepreneurial intent and externalities
Abstract
Do potential entrepreneurs exploit welfare-destroying opportunities as much as they exploit welfare-enhancing opportunities as it is assumed in several normative models? Do we need to prevent potential entrepreneurs from being destructive or are there intrinsic limits to harm others? We experimentally investigate how people with different entrepreneurial intent exploit risky investment opportunities that are associated with negative and positive externalities. We find that participants who consider entrepreneurship as a future occupation invest significantly less than others in destructive opportunities. Nevertheless, our results support prior evidence that the entrepreneurially talented invest more in destructive opportunities. The latter effect seems to be entrepreneurship-specific, because the investment behavior of the generally more talented does not differ from that of other participants. Taken together, our results suggest that people who are willing to exploit destructive opportunities do not only do this in private ventures, but also - and maybe even more so - in wage employment.Download Info
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Paper provided by Utrecht School of Economics in its series Working Papers with number 11-05.
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Length: 34 pages
Date of creation: Mar 2011
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Handle: RePEc:use:tkiwps:1105
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Related research
Keywords: Social Psychology; Entrepreneurship; Externalities; Laboratory; Individual Behavior;Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-02 (All new papers)
- NEP-ENT-2011-04-02 (Entrepreneurship)
- NEP-EXP-2011-04-02 (Experimental Economics)
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- M. Vittoria Levati & Werner Güth & Matteo Ploner, 2005.
"On the social dimension of time and risk preferences: An experimental study,"
Papers on Strategic Interaction
2005-26, Max Planck Institute of Economics, Strategic Interaction Group.
- Werner Güth & M. Vittoria Levati & Matteo Ploner, 2008. "On The Social Dimension Of Time And Risk Preferences: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 261-272, 04.
- Sophia Rabe-Hesketh & Anders Skrondal, 2008. "Multilevel and Longitudinal Modeling Using Stata, 2nd Edition," Stata Press books, StataCorp LP, number mimus2, January.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Caliendo, Marco & Kritikos, Alexander S., 2011. "Searching for the Entrepreneurial Personality: New Evidence and Avenues for Further Research," IZA Discussion Papers 5790, Institute for the Study of Labor (IZA).
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