糖心TV

Sabrina Artinger (Said 糖心TV School, University of Oxford)

Excess Entry in Entrepreneurial Markets: Psychological and Statistical Explanations

Entrepreneurial start-ups suffer notoriously high rates of business failure. Previous research has focused on two explanations for excess entry in entrepreneurial markets: psychological and statistical. Psychological explanations attribute excess entry to entrepreneurial overconfidence and competition neglect. Statistical explanations focus on random judgmental errors made by boundedly-rational entrepreneurs attempting to estimate business opportunities in uncertain markets. We conducted an experiment that distinguished entrepreneurial markets from other types of markets, and tested psychological and statistical hypotheses for all market types. Our results show that excess entry is significantly greater in entrepreneurial markets than in other market types, and that both confidence and fallible judgment play significant roles in explaining market entry.