Rational entrepreneurs or optimistic martyrs? Some considerations on technological regimes, corporate entries, and the evolutionary role of decision biases

Impact of situational framing and complexity on charismatic, ideological and pragmatic leaders: Investigation using a computer simulation

“…Now consider what may happen as task or environmental complexity is increased. Research suggests that this discrete focus, induced via situational framing, may actually reduce the leaders' capacity to work with multiple causes and, in turn, hamper performance (Bercovitz, de Figuieredo, & Teece, 1997;Dosi, & Lovallo, 1997;Kahneman & Lovallo, 1993). Thus, it seems reasonable to believe that performance may vary by situational framing and complexity, leading to the third study hypothesis.…”

Entrepreneurship and the process of firms' entry, survival and growth

“…The econometric evidence at the sectoral and microeconomic levels is largely consistent with this outcome: studies on different countries and different sectors reveal that more than 50% of new firms exit the market within the first five years of activity (see Samuelson, 1988 and1989;Reid 1991;Geroski, 1995;Mata, Portugal and Guimaraes, 1995; expectations based on expected profits 17 , they can be understood more easily when bounded and procedural rationality is assumed (see Simon, 1982;Heiner, 1983;Dosi and Egidi, 1991) 18 . Accordingly, potential entrepreneurs may well be affected by "overconfidence", generating excess of entry, which in turn leads to infant mortality and entrepreneurial disillusion (see Dosi and Lovallo, 1998; for an experimental economics exercise see Camerer and Lovallo, 1999). Parker (2006) discusses both the psychology literature that gives reasons for expecting entrepreneurs to be especially prone to unrealistic over-optimism and previous empirical evidence showing that optimism is significantly and positively associated with the propensity to be an entrepreneur (see De Meza, 2002;Åstebro, 2003;Coelho, de Meza and Reyniers, 2004).…”

“…Accordingly, potential entrepreneurs may well be affected by "overconfidence", generating excess of entry, which in turn leads to infant mortality and entrepreneurial disillusion (see Dosi and Lovallo, 1998; for an experimental economics exercise see Camerer and Lovallo, 1999). Parker (2006) If one takes into account the (often dominant) psychological attitudes mentioned above (desire to be independent, fear of becoming unemployed, frustration in previous job) entry mistakes and excess entry can be further justified.…”

Thinking about Entry of Firms: A Theoretical Discussion

“…The basic explanation of the pattern of entry refers to the concept of "over-confidence" or "over-optimism". The entry phenomenon, according to this approach is a "knowledge-centred story" (Dosi & Lovallo, 1997), in the sense that when entrepreneurs think they perceive the existence of opportunities in the industry, they decide to enter the market because of the owned competencies that might make the opportunity profitable. The thought of holding the necessary competencies in order to become profitable in the market competitive arena is related to the ability to absorb uncertainty and to the knowledge of the firm.…”

“…Replicating an industrial environment with an experimental model, Dosi and Lovallo (1997) investigate the presence of psychological factors in influencing the entry decision. The participants to the experiment were given information about the market, such that they were able to make predictions about the opportunities of entry.…”