A hubris theory of entrepreneurship

Mathew L A Hayward, Dean A. Shepherd, Dale Griffin

Research output: Chapter in Book/Report/Conference proceedingChapter (Book)Otherpeer-review

Abstract

This paper develops a hubris theory of entrepreneurship to explain why so many new ventures are created in the shadow of high venture failure rates: More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures. Building on theory and evidence from the behavioral decision-making literature, we describe how founders' socially constructed confidence affects the manner in which they interpret information about their prior and current ventures. We then link founders' propensity to be overconfident to their decisions to allocate, use, and attain resources. In our model, founders with greater socially constructed confidence tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail.

Original languageEnglish
Title of host publicationA Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd
EditorsDean A. Shepherd
Place of PublicationCheltenham UK
PublisherEdward Elgar Publishing
Chapter12
Pages248-260
Number of pages13
ISBN (Electronic)9781783479801
ISBN (Print)9781783479795
DOIs
Publication statusPublished - 26 Dec 2014
Externally publishedYes

Keywords

  • Confidence
  • Entrepreneurship
  • Hubris
  • Resources

Cite this

Hayward, M. L. A., Shepherd, D. A., & Griffin, D. (2014). A hubris theory of entrepreneurship. In D. A. Shepherd (Ed.), A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd (pp. 248-260). Cheltenham UK: Edward Elgar Publishing. https://doi.org/10.4337/9781783479801.00020
Hayward, Mathew L A ; Shepherd, Dean A. ; Griffin, Dale. / A hubris theory of entrepreneurship. A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd. editor / Dean A. Shepherd. Cheltenham UK : Edward Elgar Publishing, 2014. pp. 248-260
@inbook{6a4fa1ac24814505af3539b4c40b0da4,
title = "A hubris theory of entrepreneurship",
abstract = "This paper develops a hubris theory of entrepreneurship to explain why so many new ventures are created in the shadow of high venture failure rates: More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures. Building on theory and evidence from the behavioral decision-making literature, we describe how founders' socially constructed confidence affects the manner in which they interpret information about their prior and current ventures. We then link founders' propensity to be overconfident to their decisions to allocate, use, and attain resources. In our model, founders with greater socially constructed confidence tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail.",
keywords = "Confidence, Entrepreneurship, Hubris, Resources",
author = "Hayward, {Mathew L A} and Shepherd, {Dean A.} and Dale Griffin",
year = "2014",
month = "12",
day = "26",
doi = "10.4337/9781783479801.00020",
language = "English",
isbn = "9781783479795",
pages = "248--260",
editor = "Shepherd, {Dean A.}",
booktitle = "A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd",
publisher = "Edward Elgar Publishing",
address = "United Kingdom",

}

Hayward, MLA, Shepherd, DA & Griffin, D 2014, A hubris theory of entrepreneurship. in DA Shepherd (ed.), A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd. Edward Elgar Publishing, Cheltenham UK, pp. 248-260. https://doi.org/10.4337/9781783479801.00020

A hubris theory of entrepreneurship. / Hayward, Mathew L A; Shepherd, Dean A.; Griffin, Dale.

A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd. ed. / Dean A. Shepherd. Cheltenham UK : Edward Elgar Publishing, 2014. p. 248-260.

Research output: Chapter in Book/Report/Conference proceedingChapter (Book)Otherpeer-review

TY - CHAP

T1 - A hubris theory of entrepreneurship

AU - Hayward, Mathew L A

AU - Shepherd, Dean A.

AU - Griffin, Dale

PY - 2014/12/26

Y1 - 2014/12/26

N2 - This paper develops a hubris theory of entrepreneurship to explain why so many new ventures are created in the shadow of high venture failure rates: More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures. Building on theory and evidence from the behavioral decision-making literature, we describe how founders' socially constructed confidence affects the manner in which they interpret information about their prior and current ventures. We then link founders' propensity to be overconfident to their decisions to allocate, use, and attain resources. In our model, founders with greater socially constructed confidence tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail.

AB - This paper develops a hubris theory of entrepreneurship to explain why so many new ventures are created in the shadow of high venture failure rates: More confident actors are moved to start ventures, and then act on such confidence when deciding how to allocate resources in their ventures. Building on theory and evidence from the behavioral decision-making literature, we describe how founders' socially constructed confidence affects the manner in which they interpret information about their prior and current ventures. We then link founders' propensity to be overconfident to their decisions to allocate, use, and attain resources. In our model, founders with greater socially constructed confidence tend to deprive their ventures of resources and resourcefulness and, therefore, increase the likelihood that their ventures will fail.

KW - Confidence

KW - Entrepreneurship

KW - Hubris

KW - Resources

UR - http://www.scopus.com/inward/record.url?scp=84959150091&partnerID=8YFLogxK

U2 - 10.4337/9781783479801.00020

DO - 10.4337/9781783479801.00020

M3 - Chapter (Book)

SN - 9781783479795

SP - 248

EP - 260

BT - A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd

A2 - Shepherd, Dean A.

PB - Edward Elgar Publishing

CY - Cheltenham UK

ER -

Hayward MLA, Shepherd DA, Griffin D. A hubris theory of entrepreneurship. In Shepherd DA, editor, A Psychological Approach to Entrepreneurship: Selected Essays of Dean A. Shepherd. Cheltenham UK: Edward Elgar Publishing. 2014. p. 248-260 https://doi.org/10.4337/9781783479801.00020