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Entrepreneurs, Effectual Logic, and Over–Trust

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  • Sanjay Goel
  • Ranjan Karri

Abstract

This article complements extant literature on entrepreneurship and trust by proposing a model of over–trust (the tendency to trust more than what is warranted) using entrepreneurial characteristics and effectual logic. We trace how entrepreneurs following effectual processes may tend to over–trust. More formally, we propose that specific personality characteristics of the entrepreneur interact with effectual logic to make the entrepreneur more susceptible to over–trust. The proposed model is value neutral in that we do not imply that over–trust has negative consequences for entrepreneurs. In fact, it may be part of the overall risk that entrepreneurs assume in a new venture creation.

Suggested Citation

  • Sanjay Goel & Ranjan Karri, 2006. "Entrepreneurs, Effectual Logic, and Over–Trust," Entrepreneurship Theory and Practice, , vol. 30(4), pages 477-493, July.
    • Handle: RePEc:sae:entthe:v:30:y:2006:i:4:p:477-493
    DOI: 10.1111/j.1540-6520.2006.00131.x
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    1. Aleksandra Gawel & Timo Toikko, 2023. "Quality of Governance and Welfare Generosity as Institutional Predictors of Entrepreneurship: European Perspective," SAGE Open, , vol. 13(4), pages 21582440231, October.
    2. Patricia Strauß & Andrea Greven & Malte Brettel, 2021. "Determining the influence of national culture: insights into entrepreneurs’ collective identity and effectuation," International Entrepreneurship and Management Journal, Springer, vol. 17(2), pages 981-1006, June.
    3. Claus Schreier & Sylvie Scherrer & Nuntana Udomkit & Jillaine Farrar, 2020. "Trustworthy Small and Medium-sized Enterprise Network Partners: Small and Medium-sized Enterprise Partnerships in the International Entrepreneurial Process," Global Business Review, International Management Institute, vol. 21(1), pages 88-107, February.
    4. Andrew L. Maxwell & Moren Lévesque, 2014. "Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors," Entrepreneurship Theory and Practice, , vol. 38(5), pages 1057-1080, September.
    5. Saras Sarasvathy & K. Kumar & Jeffrey G. York & Suresh Bhagavatula, 2014. "An Effectual Approach to International Entrepreneurship: Overlaps, Challenges, and Provocative Possibilities," Entrepreneurship Theory and Practice, , vol. 38(1), pages 71-93, January.
    6. Oliveira, Luis & Johanson, Martin, 2021. "Trust and firm internationalization: Dark-side effects on internationalization speed and how to alleviate them," Journal of Business Research, Elsevier, vol. 133(C), pages 1-12.
    7. Mumford, Jonathan Van & Zettinig, Peter, 2022. "Co-creation in effectuation processes: A stakeholder perspective on commitment reasoning," Journal of Business Venturing, Elsevier, vol. 37(4).

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