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Entrepreneurs: intuitive or contemplative decision-makers?

Author

Listed:
  • Martin Koudstaal

    (Rabobank)

  • Randolph Sloof

    (University of Amsterdam (UvA) and Tinbergen Institute (TI)
    Copenhagen Business School, Vrije Universiteit, CEPR, IZA and TI)

  • Mirjam Praag

    (Rabobank)

Abstract

In a large survey (n = 1928), we examine whether entrepreneurs differ in their decision-making style from managers and employees. Besides two self-reported measures taken from psychology, we build on Rubinstein (Quarterly Journal of Economics 131: 859–890, 2016) by including two behavioral measures derived from response times and the nature of the strategic choices made. Supporting conventional wisdom, entrepreneurs report a stronger Faith in Intuition than others. Their actual choices are partly in line with this: entrepreneurs make indeed more intuitive choices than managers, but are equally intuitive as employees. At the same time, entrepreneurs have response times and a self-reported Need for Cognition that exceeds those of employees. Together, these findings tentatively suggest that entrepreneurs start from a stronger predisposition to choose the intuitive action, but share with managers that they take more time to think things over and thereby are more inclined to move away from their instant intuitive choice.

Suggested Citation

  • Martin Koudstaal & Randolph Sloof & Mirjam Praag, 2019. "Entrepreneurs: intuitive or contemplative decision-makers?," Small Business Economics, Springer, vol. 53(4), pages 901-920, December.
    • Handle: RePEc:kap:sbusec:v:53:y:2019:i:4:d:10.1007_s11187-018-0109-2
    DOI: 10.1007/s11187-018-0109-2
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    References listed on IDEAS

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    1. Syngjoo Choi & Shachar Kariv & Wieland M?ller & Dan Silverman, 2014. "Who Is (More) Rational?," American Economic Review, American Economic Association, vol. 104(6), pages 1518-1550, June.
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    4. Martin Koudstaal & Randolph Sloof & Mirjam van Praag, 2016. "Risk, Uncertainty, and Entrepreneurship: Evidence from a Lab-in-the-Field Experiment," Management Science, INFORMS, vol. 62(10), pages 2897-2915, October.
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    Cited by:

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    2. Minciu Mihaela & Berar Florin-Aurel & Dobrea Razvan Catalin, 2020. "New decision systems in the VUCA world," Management & Marketing, Sciendo, vol. 15(2), pages 236-254, June.
    3. Lammers, Thorsten & Rashid, Lubna & Kratzer, Jan & Voinov, Alexey, 2022. "An analysis of the sustainability goals of digital technology start-ups in Berlin," Technological Forecasting and Social Change, Elsevier, vol. 185(C).

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    More about this item

    Keywords

    Entrepreneurs; Contemplativeness; Response times; Faith in Intuition; Need for Cognition; Lab-in-the-field experiment;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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