The influence of ‘hot heads’ on entrepreneurial and prosocial decision making

Entrepreneurial and nonentrepreneurial life is about making decisions. For centuries, the process of making such decisions was viewed as purely rational and cognitive – an understanding that was long echoed in the entrepreneurship literature. However, at the beginning of this millennium, this non-emotional, utility-maximizing decision-making concept was challenged by the rise of manifold studies from social psychology and neuroscience providing empirical evidence for the role of emotions in decision making. These findings have then also been incorporated into the literature on entrepreneurship, which has begun to capture entrepreneurial action as an emotional journey. Yet, little is known empirically about the interplay of these emotional and cognitive processes during entrepreneurial decision making. Inspired by multiple calls for research on this topic, this dissertation investigates when emotions facilitate or impair effective entrepreneurial and ethical decision making. For this, this manuscript summarizes three studies, each with a distinct, unique, real-world dataset. The first research setting analyzes the effect of emotions relived through empathy on the level of entrepreneurial action in the form of new product launches. The empirical analysis on 4,425 real entrepreneurs reveals that relived emotions affect these entrepreneurs’ new product launches in an inverted U-shaped relationship, suggesting a novel “too-much-of-a-good-thing” logic for entrepreneurial empathy. The second study investigates the effect of emotions on the resource acquisition effectiveness of survival-driven crowdfunding campaigns, an entirely new campaign type. In this study, we demonstrate that for this new campaign type, negative emotional tone strategies can facilitate resource acquisition, contrasting the thus far prevailing understanding that positive emotional cues are universally beneficial for improving crowdfunding success. Finally, the last study of this dissertation analyzes the rational and emotional motives for sharing electricity during a long-lasting power outage. The empirical results of this third study show that emotional motives play a surprisingly strong role relative to rational factors for facilitating prosocial contribution behavior in such a crisis setting. With these three multifaceted research settings, this dissertation as a whole clearly illustrates the need for close interaction of both cognitive and emotional factors for effective entrepreneurial and ethical decision making.