Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322955 
Year of Publication: 
2016
Series/Report no.: 
U.S.E. Discussion Papers Series No. 16-14
Publisher: 
Utrecht University, Utrecht University School of Economics, Tjalling C. Koopmans Research Institute, Utrecht
Abstract: 
Recent research on cognitive biases in decision making suggests that over-optimism critically influences entrepreneurs' decisions to establish and sustain new firms. This paper looks at entrepreneurs' over-optimism during the early life course of the firm, in order to uncover the dynamics and persistence of over-optimism. We use a representative sample of start-ups in the Netherlands, which we divide into solo self-employed and employer firms. We find that while there is a persistence of over-optimism for the solo self-employed, namely initial over-optimist are more likely to be overoptimistic in subsequent periods; this is not the case for the employer firms.
Subjects: 
over-optimism
entrepreneurship
learning
risk-propensity
biases
early life course of the firm
firm growth
Document Type: 
Working Paper

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