Entrepreneurs Seeking Gains: Profit Motives and Risk Aversion in Inventors' Commercialization Decisions

Thomas Astebro and Kenneth Simons

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Abstract: Direct evidence has been lacking on entrepreneurs' response to individual-specific opportunities, and recent work suggests that entrepreneurship may be a non-profit-seeking activity and that entrepreneurs evaluate risk oddly. We model heterogeneous inventors and inventions, outside opportunities, sunk and nonsunk costs, and risk, to guide data analysis. We use assessment data from a center paid to assess the inventions' economic potential. Inventors' choices whether to commercialize their inventions and later whether to remain in production were consistent with profit-seeking motives and risk aversion.

Keywords: Innovation; Invention; Entrepreneurship; Rationality; Risk; Entry; Exit; Survival; Sunk Cost (search for similar items in EconPapers)
Date: 2010-11
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Citations: View citations in EconPapers (7)

Published in Journal of Economics and Management Strategy, 2010, 19 (4), pp.863-888. ⟨10.1111/j.1530-9134.2010.00272.x⟩

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Journal Article: Entrepreneurs Seeking Gains: Profit Motives and Risk Aversion in Inventors’ Commercialization Decisions (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00586047

DOI: 10.1111/j.1530-9134.2010.00272.x

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