IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Exploiting opportunities at all cost? Entrepreneurial intent and externalities

  • Urbig, Diemo
  • Weitzel, Utz
  • Rosenkranz, Stephanie
  • Witteloostuijn, Arjen van

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0167487011000341
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 33 (2012)
Issue (Month): 2 ()
Pages: 379-393

as
in new window

Handle: RePEc:eee:joepsy:v:33:y:2012:i:2:p:379-393
Contact details of provider: Web page: http://www.elsevier.com/locate/joep

References listed on IDEAS
Please 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.:

as in new window
  1. Oechssler, Jörg, 2009. "Searching beyond the lamppost: Let’s focus on economically relevant questions," Working Papers 0486, University of Heidelberg, Department of Economics.
  2. Geoffrey Brennan & Werner Güth & Luis G. Gonzalez & M. Vittoria Levati, 2005. "Attitudes toward Private and Collective Risks in Individual and Strategic Choice Situations," Papers on Strategic Interaction 2005-22, Max Planck Institute of Economics, Strategic Interaction Group.
  3. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, vol. 83(2), pages 409-14, May.
  4. Caliendo, Marco & Fossen, Frank M. & Kritikos, Alexander S., 2006. "Risk Attitudes of Nascent Entrepreneurs: New Evidence from an Experimentally-Validated Survey," IZA Discussion Papers 2168, Institute for the Study of Labor (IZA).
  5. Binmore, Ken & Shaked, Avner, 2010. "Experimental Economics: Where Next? Rejoinder," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 120-121, January.
  6. Weitzel, Utz & Urbig, Diemo & Desai, Sameeksha & Sanders, Mark & Acs, Zoltan, 2010. "The good, the bad, and the talented: Entrepreneurial talent and selfish behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 64-81, October.
  7. Marco Caliendo & Frank M. Fossen & Alexander S. Kritikos, 2008. "The Impact of Risk Attitudes on Entrepreneurial Survival," SOEPpapers on Multidisciplinary Panel Data Research 108, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Sobel, Russell S., 2008. "Testing Baumol: Institutional quality and the productivity of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 641-655, November.
  9. Sophia Rabe-Hesketh & Anders Skrondal, 2012. "Multilevel and Longitudinal Modeling Using Stata, 3rd Edition," Stata Press books, StataCorp LP, edition 3, number mimus2, November.
  10. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  11. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1990. "The Allocation of Talent: Implications for Growth," NBER Working Papers 3530, National Bureau of Economic Research, Inc.
  12. Christian Schade, 2005. "Dynamics, Experimental Economics, and Entrepreneurship," The Journal of Technology Transfer, Springer, vol. 30(4), pages 409-431, October.
  13. Casamatta, Catherine, 2002. "Financing and Advising: Optimal Financial Contracts with Venture Capitalists," CEPR Discussion Papers 3475, C.E.P.R. Discussion Papers.
  14. Fehr, Ernst & Schmidt, Klaus M., 2010. "On inequity aversion: A reply to Binmore and Shaked," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 101-108, January.
  15. Binmore, Ken & Shaked, Avner, 2010. "Experimental economics: Where next?," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 87-100, January.
  16. Kolvereid, Lars & Isaksen, Espen, 2006. "New business start-up and subsequent entry into self-employment," Journal of Business Venturing, Elsevier, vol. 21(6), pages 866-885, November.
  17. Fairchild, Richard, 2011. "An entrepreneur's choice of venture capitalist or angel-financing: A behavioral game-theoretic approach," Journal of Business Venturing, Elsevier, vol. 26(3), pages 359-374, May.
  18. Schade, Christian & Burmeister-Lamp, Katrin, 2009. "Experiments on Entrepreneurial Decision Making: A Different Lens Through Which to Look at Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(2), pages 81-134, March.
  19. Mehlum,H. & Moene,K. & Torvik,R., 2000. "Predator or prey? : parasitic enterprises in economic development," Memorandum 27/2000, Oslo University, Department of Economics.
  20. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
  21. 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.
  22. Drehmann, Mathias & Oechssler, Jörg & Roider, Andreas, 2004. "Herding and Contrarian Behavior in Financial Markets - An Internet Experiment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 7, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  23. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
  24. Wijbenga, Frits H. & van Witteloostuijn, Arjen, 2007. "Entrepreneurial locus of control and competitive strategies - The moderating effect of environmental dynamism," Journal of Economic Psychology, Elsevier, vol. 28(5), pages 566-589, October.
  25. Daron Acemoglu, 1993. "Reward Structures and the Allocation of Talent," CEP Discussion Papers dp0143, Centre for Economic Performance, LSE.
  26. John List & Jonathan Alevy & Michael Haigh, 2005. "Information cascades: Evidence from a field experiment with financial market professionals," Framed Field Experiments 00116, The Field Experiments Website.
  27. Harry P Bowen & Dirk De Clercq, 2008. "Institutional context and the allocation of entrepreneurial effort," Journal of International Business Studies, Palgrave Macmillan, vol. 39(4), pages 747-767, June.
  28. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
  29. KruegerJR, Norris F. & Reilly, Michael D. & Carsrud, Alan L., 2000. "Competing models of entrepreneurial intentions," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 411-432.
  30. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
  31. Edward P. Lazear & Kathryn L. Shaw, 2007. "Personnel Economics: The Economist's View of Human Resources," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 91-114, Fall.
  32. Julie Elston & David Audretsch, 2011. "Financing the entrepreneurial decision: an empirical approach using experimental data on risk attitudes," Small Business Economics, Springer, vol. 36(2), pages 209-222, February.
  33. Chen, Chao C. & Greene, Patricia Gene & Crick, Ann, 1998. "Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?," Journal of Business Venturing, Elsevier, vol. 13(4), pages 295-316, July.
  34. Elitzur, Ramy & Gavious, Arieh, 2003. "Contracting, signaling, and moral hazard: a model of entrepreneurs, 'angels,' and venture capitalists," Journal of Business Venturing, Elsevier, vol. 18(6), pages 709-725, November.
  35. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  36. Daniel Bello & Kwok Leung & Lee Radebaugh & Rosalie L Tung & Arjen van Witteloostuijn, 2009. "From the Editors: Student samples in international business research," Journal of International Business Studies, Palgrave Macmillan, vol. 40(3), pages 361-364, April.
  37. Houser, Daniel & Xiao, Erte, 2010. "Understanding context effects," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 58-61, January.
  38. Bonnett, Celia & Furnham, Adrian, 1991. "Who wants to be an entrepreneur? A study of adolescents interested in a Young Enterprise scheme," Journal of Economic Psychology, Elsevier, vol. 12(3), pages 465-478, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:33:y:2012:i:2:p:379-393. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.