Prediction Based on Entrepreneurship-Prone Personality Profiles: Sometimes Worse Than the Toss of a Coin

Alexander Konon () and Alexander Kritikos
Additional contact information
Alexander Konon: DIW Berlin

No 11880, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The human personality predicts a wide range of activities and occupational choices—from musical sophistication to entrepreneurial careers. However, which method should be applied if information on personality traits is used for prediction and advice? In psychological research, group profiles are widely employed. In this contribution, we examine the performance of profiles using the example of career prediction and advice, involving a comparison of average trait scores of successful entrepreneurs with the traits of potential entrepreneurs. Based on a simple theoretical model estimated with GSOEP data and analyzed with Monte Carlo methods, we show, for the first time, that the choice of the comparison method matters substantially. We reveal that under certain conditions the performance of aver-age profiles is inferior to the tossing of a coin. Alternative methods, such as directly estimating success probabilities, deliver better performance and are more robust.

Keywords: entrepreneurship; personality; advice; profiles (search for similar items in EconPapers)
JEL-codes: C15 D81 L26 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2018-10
New Economics Papers: this item is included in nep-ent and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Small Business Economics, 2019, 53 (1), 1-20

Downloads: (external link)
https://docs.iza.org/dp11880.pdf (application/pdf)

Related works:
Journal Article: Prediction based on entrepreneurship-prone personality profiles: sometimes worse than the toss of a coin (2019)
Journal Article: Prediction based on entrepreneurship-prone personality profiles: sometimes worse than the toss of a coin (2019)
Working Paper: Prediction Based on Entrepreneurship-Prone Personality Profiles: Sometimes Worse Than the Toss of a Coin (2018)
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:iza:izadps:dp11880

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().