Entrepreneurial Risk: Have We Been Asking the Wrong Question?

William I. Norton, William T. Moore

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

Entrepreneurs are often thought to engage in "risky" behaviors. Thus, they may be seen as more willing than average to take risks. We offer a dissenting view. Central to entrepreneurship is the alertness perspective which suggests that entrepreneurs may assess opportunities and threats differently than non-entrepreneurs. That differential assessment may be understood in terms of Bayesian probability. The Bayesian model argues that differing assessments of prospective outcomes may be attributable to differences in prior information. This perspective on risk assessment has implications for entrepreneurial decision making, whether to launch a new venture or adopt a growth strategy. The literature is reviewed, a synthesis is offered, a numerical example is developed, and a research agenda is proposed.
Original languageAmerican English
JournalSmall Business Economics
Volume18
DOIs
StatePublished - Jun 2002

Keywords

  • Behaviors
  • Entrepreneurial risk
  • Entrepreneurship

DC Disciplines

  • Business

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