New Results on Entrepreneurship and Risk
Marcos Vergara and
Richard Watt ()
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Richard Watt: University of Canterbury, https://www.canterbury.ac.nz
Working Papers in Economics from University of Canterbury, Department of Economics and Finance
In this paper we study two decisions made by an individual. First, the decision to transit from paid and secure employment into risky entrepreneurship and second, the decision about the size or scale of the venture for transitioned entrepreneurs. In doing so, we focus on the risk attitudes and characteristics of the decision makers to analyze the effects of greater risk aversion, wealth increases and stochastic dominant shifts in the distribution of results. Interesting results arise for our comparative static results, where risk aversion, the DARA property and an upper bound for absolute risk aversion coefficient play the key roles in our results.
Keywords: Entrepreneurship; Risk Aversion; DARA (search for similar items in EconPapers)
JEL-codes: D81 L26 (search for similar items in EconPapers)
Pages: 35 pages
New Economics Papers: this item is included in nep-ent, nep-ore and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:19/20
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