They want what I want: User entrepreneurship, egocentric bias, and overconfidence in early-stage entrepreneurial decision-making

Livia Boerner ()
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Livia Boerner: Paderborn University

No 121, Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics

Abstract: User entrepreneurship is the phenomenon of entrepreneurs developing and commercializing a business idea to fulfil their own subjective need. The paper explores this phenomenon with a focus on understanding its downsides linked to egocentric bias and overconfidence. For this study, a research team coded and analyzed N = 553 pitches of early-stage startups in the pitch competition Die Höhle der Löwen. Controlling for a range of covariates, results suggests that end-user entrepreneurs systematically overestimate the valuation of their business idea compared to others, indicating egocentrically biased and overconfident market entry decisions. Correspondingly, they are less likely to secure funding from investors and obtain significantly lower business valuations overall. These findings complement the literature on pitch competitions, early access to funding and bias in entrepreneurial decision-making.

Keywords: User entrepreneurship; Opportunity recognition; Overconfidence; Egocentric bias; Televised startup pitches (search for similar items in EconPapers)
JEL-codes: D81 D84 D90 L26 O30 (search for similar items in EconPapers)
Pages: 30
Date: 2024-09
New Economics Papers: this item is included in nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:pdn:dispap:121

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