Overoptimism among Founders: The Role of Information and Motivation

Ingrid Verheul () and Martin Carree

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: This study empirically investigates factors that influence overoptimism across nascent entrepreneurs. We distinguish between two main groups of determinants (information, motivation) and three types of overoptimism (income, psychological burden, leisure time). Findings indicate that entrepreneurs who have relevant business information are more realistic and that entrepreneurs with a high level of general knowledge, acquired through education or previous (unrelated) entrepreneurial experience, are more overoptimistic. External advice and business planning do not appear to limit subsequent overoptimism. Entrepreneurs are less overoptimistic about the pecuniary or non-pecuniary benefits of self-employment when these benefits are closely related to the initial motivation for starting up the business.

Keywords: information; motivation; nascent entrepreneurs; overoptimism (search for similar items in EconPapers)
JEL-codes: M M13 O32 (search for similar items in EconPapers)
Date: 2008-03-03
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ems:eureri:11557

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