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Prediction- and Control-Based Strategies in Entrepreneurship: The Role of Information

Author

Listed:
  • Kuechle Graciela

    () (Heilbroon University)

  • Béatrice Boulu-Reshef

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Sean D. Carr

    (University of Virginia - University of Virginia [Charlottesville])

Abstract

Prediction- and control-based strategies are the two main hypotheses of how entrepreneurs deal with uncertainty in theories of entrepreneurship. Prediction-based strategies focus on estimating unknowns via sampling methods, whereas control-based strategies focus on shaping unknowns via proactive behavior. These strategies may lead to different propensities to undertake uncertain prospects, as they differ in terms of cognition and involvement. In an experimental test, we study the conditions under which prediction- and control-based strategies lead subjects to accept bets in ambiguous environments. Individuals who use control methods to mitigate uncertainty are more likely to accept the bet after a favorable outcome compared to those who use predictive methods. These results revert in the presence of unfavorable outcomes. We discuss the implications for entrepreneurship theory and practice.

Suggested Citation

  • Kuechle Graciela & Béatrice Boulu-Reshef & Sean D. Carr, 2016. "Prediction- and Control-Based Strategies in Entrepreneurship: The Role of Information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01296948, HAL.
  • Handle: RePEc:hal:cesptp:hal-01296948
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01296948
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    Cited by:

    1. repec:spr:rvmgts:v:13:y:2019:i:1:d:10.1007_s11846-017-0242-3 is not listed on IDEAS
    2. repec:gam:jsusta:v:10:y:2018:i:3:p:602-:d:133506 is not listed on IDEAS
    3. Engel, Yuval & Kaandorp, Mariëtte & Elfring, Tom, 2017. "Toward a dynamic process model of entrepreneurial networking under uncertainty," Journal of Business Venturing, Elsevier, vol. 32(1), pages 35-51.
    4. repec:spr:scient:v:116:y:2018:i:3:d:10.1007_s11192-018-2809-4 is not listed on IDEAS
    5. repec:eee:jbvent:v:34:y:2019:i:2:p:284-310 is not listed on IDEAS

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