A Hubris Theory of Entrepreneurship

Mathew L. A. Hayward (), Dean A. Shepherd () and Dale Griffin ()
Additional contact information
Mathew L. A. Hayward: Leeds School of Business, University of Colorado at Boulder, Boulder, Colorado 80309-0419
Dean A. Shepherd: Kelley School of Business, Indiana University, 1309 East Tenth Street, Bloomington, Indiana 47405
Dale Griffin: Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, British Columbia, Canada V6T 1Z2

Management Science, 2006, vol. 52, issue 2, 160-172

Abstract: This paper develops a hubris theory of entrepreneurship to explain why so many new ventures are created in the shadow of high venture failure rates: More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures. Building on theory and evidence from the behavioral decision-making literature, we describe how founders' socially constructed confidence affects the manner in which they interpret information about their prior and current ventures. We then link founders' propensity to be overconfident to their decisions to allocate, use, and attain resources. In our model, founders with greater socially constructed confidence tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail.

Keywords: confidence; hubris; entrepreneurship; resources (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (215)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.1050.0483 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:52:y:2006:i:2:p:160-172

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().