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Journal ArticleDOI

Evaluation of Entrepreneurial Risk-Taking using Magnitude of Loss Scale:

01 Jan 2006-Journal of Entrepreneurship (SAGE Publications)-Vol. 15, Iss: 1, pp 37-46

Abstract: The importance of risk-taking in business ventures has been emphasised by many. Attempts to distinguish entrepreneurs on their risk-taking propensity have produced conflicting results. Data on two ...
Topics: Scale (ratio) (60%)
Citations
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01 Jan 1961-
Abstract: Examines the motivation for achievement as a psychological factor that shapes economic development. Refuting arguments based on race, climate, or population growth, the book instead argues for cultural customs and motivations - especially the motivation for achievement - as the major catalysts of economic growth. Considering the Protestant Reformation, the rise of capitalism, parents' influences on sons, and folklore and children's stories as shaping cultural motivations for achievement, the book hypothesizes that a high level of achievement motivation precedes economic growth. This is supported through qualitative analysis of the achievement motive, as well as of other psychological factors - including entrepreneurial behavior and characteristics, and available sources of achievement in past and present highly achieving societies. It is the achievement motive - and not merely the profit motive or the desire for material gain - that has advanced societies economically. Consequently, individuals are not merely products of their environment, as many social scientists have asserted, but also creators of the environment, as they manipulate it in various ways in the search for achievement. Finally, a plan is hypothesized to accelerate economic growth in developing countries, by encouraging and supplementing their achievement motives through mobilizing the greater achievement resources of developed countries. The conclusion is not just that motivations shape economic progress, but that current influences on future people's motivations and values will determine economic growth in the long run. Thus, it is most beneficial for a society to concentrate its resources on creating an environment conducive to entrepreneurship and a strong ideological base for achievement. (CJC)

359 citations


Journal ArticleDOI
Jeffrey W. Alstete1Institutions (1)
Abstract: Purpose – Guidance from successful individuals can be valuable to prospective and nascent entrepreneurs, as well as writers and instructors in the field. This paper seeks to confirm contemporary entrepreneurship concepts, examine current perceptions, and expand the knowledge base by exploring established entrepreneurship perceptions through first‐hand accounts of successful small business owners.Design/methodology/approach – This qualitative research study summarizes and analyzes interviews with 149 established entrepreneurs and small business owners regarding their perceptions on the advantages and disadvantages of their endeavors, and on providing advice to prospective new venture creators.Findings – The research revealed that entrepreneurs enjoy the independence, freedom, job satisfaction, and money, but believe the long hours, stress, responsibility, risk, and lack of company benefits are drawbacks of entrepreneurial activity. The findings largely support previous research in the field, while clarifyi...

116 citations


Cites background from "Evaluation of Entrepreneurial Risk-..."

  • ...The risk-taking propensity of entrepreneurs has been fairly widely-studied over many years (Hull et al., 1980; Kamalanabhan et al., 2006; Knight, 1971; Palmer, 1971), but generally has resulted in conflicting findings and is not usually researched as a potentially negative factor of entrepreneurship as a career choice....

    [...]


Journal ArticleDOI
Abstract: Despite numerous research studies the theme of ‘Why, when and how some people (entrepreneurs) and not others discover, evaluate and exploit entrepreneurial opportunities?’ still needs intensive inq...

50 citations


Journal ArticleDOI
Abstract: The personal characteristics of entrepreneurs can be importantly related to entrepreneurial startup intentions and behaviors. A country-moderated hypothesis including the relationship between an in...

19 citations


Journal ArticleDOI
Abstract: Entrepreneurs’, college students’ and criminals’ risk-taking were compared in hypothetical bet situations. The level of uncertainty and the amount staked were varied in gain and loss situations. Potential profit motivates entrepreneurs to choose higher stakes, expected loss will prompt the avoidance of risk. In profit-making situations, college students’ strategies are different: Students’ decisions are more influenced by probability factors than by the amount staked. Risk-taking tendency of criminals is higher than that of the other two groups, without applying a consistent strategy in taking risk.

17 citations


References
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Journal ArticleDOI
Amos Tversky1, Daniel Kahneman2Institutions (2)
30 Jan 1981-Science
TL;DR: The psychological principles that govern the perception of decision problems and the evaluation of probabilities and outcomes produce predictable shifts of preference when the same problem is framed in different ways.
Abstract: The psychological principles that govern the perception of decision problems and the evaluation of probabilities and outcomes produce predictable shifts of preference when the same problem is framed in different ways. Reversals of preference are demonstrated in choices regarding monetary outcomes, both hypothetical and real, and in questions pertaining to the loss of human lives. The effects of frames on preferences are compared to the effects of perspectives on perceptual appearance. The dependence of preferences on the formulation of decision problems is a significant concern for the theory of rational choice.

14,525 citations


"Evaluation of Entrepreneurial Risk-..." refers methods in this paper

  • ...The classical framing paradigm first reported by Tversky and Kahneman (1981) presented decision-makers with a set of choices that were invariant with respect to expected values of their outcomes but differed in their degree of risk....

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Book
01 Jan 1921-
Abstract: In Risk, Uncertainty and Profit, Frank Knight explored the riddle of profitability in a competitive market profit should not be possible under competitive conditions, as the entry of new entrepreneurs would drive prices down and nullify margins, however evidence abounds of competitive yet profitable markets. To explain this seeming paradox, Knight uncovers the distinction between calculable risk and essentially unknowable uncertainty. Knight argued that risk stems from repeated events, which therefore allow probabilities to be calculated and factored into decisions, as for instance insurers do. Uncertainty however, stems from events that are unpredictable and as such cannot be prepared against. According to Knight, it is the interplay between risk and uncertainty on the one hand and competition between incumbent and new entrepreneurs that accounts for the enormous variation in profitability across firms and, for the same firms, over time. His insights on the sources of profit have been instrumental in shaping modern economic theory and to the development of a useful understanding of probability. This New Edition has been typeset with modern techniques and contains a newly compiled Index of important topics. It has been painstakingly proofread to ensure that it is free from errors and that the content is faithful to the original.

10,053 citations


"Evaluation of Entrepreneurial Risk-..." refers background in this paper

  • ...One aspect of entrepreneurship which is widely acknowledged and is intuitively appealing is risk-taking (Knight, 1971)....

    [...]

  • ...Discussion Risk-taking is inherent in entrepreneurship (Dickson & Gigilierano, 1986; Knight, 1971; Palmer, 1971)....

    [...]


Book
01 Jan 1961-
Abstract: Examines the motivation for achievement as a psychological factor that shapes economic development. Refuting arguments based on race, climate, or population growth, the book instead argues for cultural customs and motivations - especially the motivation for achievement - as the major catalysts of economic growth. Considering the Protestant Reformation, the rise of capitalism, parents' influences on sons, and folklore and children's stories as shaping cultural motivations for achievement, the book hypothesizes that a high level of achievement motivation precedes economic growth. This is supported through qualitative analysis of the achievement motive, as well as of other psychological factors - including entrepreneurial behavior and characteristics, and available sources of achievement in past and present highly achieving societies. It is the achievement motive - and not merely the profit motive or the desire for material gain - that has advanced societies economically. Consequently, individuals are not merely products of their environment, as many social scientists have asserted, but also creators of the environment, as they manipulate it in various ways in the search for achievement. Finally, a plan is hypothesized to accelerate economic growth in developing countries, by encouraging and supplementing their achievement motives through mobilizing the greater achievement resources of developed countries. The conclusion is not just that motivations shape economic progress, but that current influences on future people's motivations and values will determine economic growth in the long run. Thus, it is most beneficial for a society to concentrate its resources on creating an environment conducive to entrepreneurship and a strong ideological base for achievement. (CJC)

6,677 citations


Posted Content
Abstract: Examines the motivation for achievement as a psychological factor that shapes economic development. Refuting arguments based on race, climate, or population growth, the book instead argues for cultural customs and motivations - especially the motivation for achievement - as the major catalysts of economic growth. Considering the Protestant Reformation, the rise of capitalism, parents' influences on sons, and folklore and children's stories as shaping cultural motivations for achievement, the book hypothesizes that a high level of achievement motivation precedes economic growth. This is supported through qualitative analysis of the achievement motive, as well as of other psychological factors - including entrepreneurial behavior and characteristics, and available sources of achievement in past and present highly achieving societies. It is the achievement motive - and not merely the profit motive or the desire for material gain - that has advanced societies economically. Consequently, individuals are not merely products of their environment, as many social scientists have asserted, but also creators of the environment, as they manipulate it in various ways in the search for achievement. Finally, a plan is hypothesized to accelerate economic growth in developing countries, by encouraging and supplementing their achievement motives through mobilizing the greater achievement resources of developed countries. The conclusion is not just that motivations shape economic progress, but that current influences on future people's motivations and values will determine economic growth in the long run. Thus, it is most beneficial for a society to concentrate its resources on creating an environment conducive to entrepreneurship and a strong ideological base for achievement. (CJC)

6,613 citations


Book
01 Jan 1982-
Abstract: I. INTRODUCTION. 1. Experimental Design. II. SINGLE FACTOR EXPERIMENTS. 2. Sources of Variability and Sums of Squares. 3. Variance Estimates and F Ratio. 4. Analytical Comparisons Among Means. 5. Analysis of Trend. 6. Simultaneous Comparisons. 7. The Linear Model and Its Assumptions. 8. Effect Size and Power. 9. Using Statistical Software. III. FACTORIAL EXPERIMENTS WITH TWO FACTORS. 10. Introduction to the Factorial Design. 11. The Principal Two-Factor Effects. 12. Main Effects and Simple Effects. 13. The Analysis of Interaction Components. IV. NONORTHOGONALITY AND THE GENERAL LINEAR MODEL. 14. General Linear Model. 15. The Analysis of Covariance. V. WITHIN-SUBJECT DESIGNS. 16. The Single-Factor Within-Subject Design. 17. Further Within-Subject Topics. 18. The Two-Factor Within-Subject Design. 19. The Mixed Design: Overall Analysis. 20. The Mixed Design: Analytical Analyses. VI. HIGHER FACTORIAL DESIGNS AND OTHER EXTENSIONS. 21. The Overall Three-Factor Design. 22. The Three-Way Analytical Analysis. 23. Within-Subject and Mixed Designs. 24. Random Factors and Generalization. 25. Nested Factors. 26. Higher-Order Designs. Appendix A: Statistical Tables.

6,213 citations


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