An entrepreneur's dilemma: An optimal stopping rule in pivoting

Mike G. Tsionas and Pankaj C. Patel

Managerial and Decision Economics, 2022, vol. 43, issue 8, 3498-3515

Abstract: Though pivoting is widely practiced by entrepreneurs, an optimal stopping rule in pivoting remains unexplored. Proposing an optimal foraging model and accounting for competition in exploiting an opportunity, we identify an optimal stopping rule of 30% gain‐to‐loss ratio. That is, additional gains are less feasible when 70% of the pivoting across future plausible versions of opportunities are traversed to. The findings have practical implications for entrepreneurs.

Date: 2022
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https://doi.org/10.1002/mde.3610

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:43:y:2022:i:8:p:3498-3515

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