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Prior-knowledge and opportunity identification

Author

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  • Jason Arentz

    ()

  • Frederic Sautet

    ()

  • Virgil Storr

    ()

Abstract

An entrepreneur’s prior knowledge and experience play a critical role in his ability to identify and exploit entrepreneurial opportunities. Although entrepreneurship research has acknowledged the role that prior information and prior knowledge play in opportunity recognition, few studies have explored their role in entrepreneurial discovery. We test the role of a particular prior knowledge in entrepreneurial discovery within a laboratory setting. Participants were randomly assigned to one of two treatment groups. Those in the propitious treatment were given prior knowledge that oriented them toward the arbitrage opportunity within the experiment, and those in the unpropitious treatment were given prior knowledge that oriented them away. As hypothesized, those in the propitious treatment were significantly more likely to discover the arbitrage opportunity. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Jason Arentz & Frederic Sautet & Virgil Storr, 2013. "Prior-knowledge and opportunity identification," Small Business Economics, Springer, vol. 41(2), pages 461-478, August.
  • Handle: RePEc:kap:sbusec:v:41:y:2013:i:2:p:461-478 DOI: 10.1007/s11187-012-9437-9
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Simon Parker, 2014. "Who become serial and portfolio entrepreneurs?," Small Business Economics, Springer, pages 887-898.
    2. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144 Edward Elgar Publishing.
    3. Vandor, Peter & Franke, Nikolaus, 2016. "See Paris and… found a business? The impact of cross-cultural experience on opportunity recognition capabilities," Journal of Business Venturing, Elsevier, vol. 31(4), pages 388-407.
    4. D. Cagno & A. Galliera & W. Güth & N. Pace & L. Panaccione, 2017. "Experience and gender effects in acquisition experiment with value messages," Small Business Economics, Springer, pages 71-97.

    More about this item

    Keywords

    Alertness; Discovery; Entrepreneurship; Opportunity; Prior knowledge; D80; L26;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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