Title: Exploring entrepreneurial decision-making strategies

Authors: William Benjamin Martz Jr., Thomas Neil, Alessandro Biscaccianti

Addresses: University of Colorado in Colorado Springs, 1420 Austin Bluffs Parkway, Colorado Springs, Colorado 80933, USA. ' Division of Business and Economics, Allen University, Columbia, SC 29204, USA. ' Burgundy School of Business, 29 Rue Sambin, 21000 Dijon, France

Abstract: The way individuals make decisions has been researched from many contexts giving rise to theoretical explanations. Two of these theories, a satisficing model and a reference-dependent model, evolved from this research. The purpose of this study is to explore how well these models explain the decision making observed in a hypothetical entrepreneurial, managerial setting that allocates a limited resource among ten interlocked alternatives over two decision periods. The results show that in this context, decision making is reference dependent. Further analysis demonstrates that a model based on aspiring to a minimal satisfaction level (aspiration seeking) better explains the results.

Keywords: entrepreneurs; innovation; learning; loss aversion; satisficing; reference-dependent model; decision-making.

DOI: 10.1504/IJIL.2006.010518

International Journal of Innovation and Learning, 2006 Vol.3 No.6, pp.658 - 672

Published online: 27 Jul 2006 *

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