Entrepreneurs Seeking Gains: Profit Motives and Risk Aversion in Inventors’ Commercialization Decisions |
| |
Authors: | Kenneth L. Simons Thomas Åstebro |
| |
Affiliation: | 1. Department of Economics Rensselaer Polytechnic Institute 110 8th Street Troy, NY 12180‐3590 simonk@rpi.edu;2. HEC Paris 1 Rue de la Liberation 78351 Jouy en Josas, France astebro@hec.fr |
| |
Abstract: | Direct evidence has been lacking on entrepreneurs’ response to individual‐specific opportunities, and recent work suggests that entrepreneurship may be a non‐profit‐seeking activity and that entrepreneurs evaluate risk oddly. We model heterogeneous inventors and inventions, outside opportunities, sunk and nonsunk costs, and risk, to guide data analysis. We use assessment data from a center paid to assess the inventions’ economic potential. Inventors’ choices whether to commercialize their inventions and later whether to remain in production were consistent with profit‐seeking motives and risk aversion. |
| |
Keywords: | |
|
|