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Perceptions of Efficacy, Control, and Risk: A Theory of Mixed Control

Author

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  • Erik Monsen

    () (Max Planck Institute of Economics, Jena, Germany)

  • Diemo Urbig

    (Max Planck Institute of Economics, Jena, Germany)

Abstract

Based on the aggregated insights of the existing theories related to multiple sources of efficacy and locus of control, we introduce the theory of mixed control, a model of compound-risk perception. This theory considers outcome expectancies as being composed of expectancies regarding three distinct sources of risk (self, others, and chance). This reflects that entrepreneurship is a complex and dynamic activity, involving multiple sources of risk. Beliefs about the efficacy of these elements are weighted by the degree to which these elements are perceived to control the outcome. The interaction of efficacy and control beliefs is therefore at the core of our theory. Further, we discuss that risks are not only subjectively perceived but can be endogenous and depend on future decisions and actions of the entrepreneur.

Suggested Citation

  • Erik Monsen & Diemo Urbig, 2009. "Perceptions of Efficacy, Control, and Risk: A Theory of Mixed Control," Jena Economic Research Papers 2009-018, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2009-018
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    File URL: http://zs.thulb.uni-jena.de/receive/jportal_jparticle_00145087
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    Cited by:

    1. Kibler, Ewald & Mandl, Christoph & Kautonen, Teemu & Berger, Elisabeth S.C., 2017. "Attributes of legitimate venture failure impressions," Journal of Business Venturing, Elsevier, vol. 32(2), pages 145-161.
    2. repec:wsi:jdexxx:v:22:y:2017:i:03:n:s1084946717500212 is not listed on IDEAS

    More about this item

    Keywords

    locus of control; self-efficacy; risk perception;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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