- Title
- A study of the effects of comparative optimism on entrepreneurial opportunity evaluation in uncertain conditions
- Creator
- Yuen, Derek Chun-kit
- Resource Type
- thesis
- Date
- 2018
- Description
- Professional Doctorate - Doctor of Business Administration (DBA)
- Description
- This dissertation examines the effects of comparative optimism on entrepreneurial opportunity evaluation in uncertain conditions. Comparative optimism refers to the phenomenon by which people report that they are less likely than others, who are their comparison targets, to encounter negative events but more likely than those comparison targets to encounter positive events. In uncertain conditions, the probability of success of an event, such as an entrepreneurial opportunity, is not measurable. Such uncertainty may be caused by the novelty of a business venture that pursues an opportunity without any precedent, an insufficient number of precedents to form any meaningful inference, or a gap in some essential information about the business venture, such as an unpredictable environment and industry performance. Extant literature has identified many factors that affect entrepreneurial opportunity evaluations, from both person-centric and cognitive perspectives. However, few studies investigate the uncertain situations in which such evaluations take place, nor does prior research examine the role of social comparisons in entrepreneurial opportunity evaluations in such conditions. This dissertation bridges the lacuna by introducing the concept of comparative optimism. Comparative optimism might condition the process of entrepreneurial opportunity evaluation. Specifically, this dissertation conjectures that comparative optimism moderates the negative relationship between uncertainty and the part-worth utility (defined as the marginal utility derived from a particular level of a single attribute), such that the relationship becomes less strongly negative. To test the hypotheses, this dissertation reports on a cross-sectional, quantitative survey, conducted to collect data from respondents of an online access panel. To control for the demographic characteristics of these respondents, only those who met certain criteria were able to participate in the survey. The research instrument was a discrete choice experiment using a dual response approach. The manipulated attributes included were attainment discrepancy, amount of investment, logic of appropriateness, country uncertainty, and industry uncertainty. A first pre-test drew on 36 valid responses to select the appropriate industry and country attributes to include; a second pre-test that produced 37 valid responses revealed whether any unrealistic profiles existed and collected baseline information for the actual test. The results reflect data collected through the actual survey, which produced 174 valid responses. The hypotheses were examined using a hierarchical Bayes approach. As hypothesised, for respondents who are comparatively optimistic, the negative relationship between the level of uncertainty and the part-worth utility is moderated and less strongly negative. Respondents who are dispositionally optimistic exhibit similar behaviours. In other words, respondents who are cognitively comparatively optimistic are more likely to evaluate an entrepreneurial opportunity favourably under uncertain conditions, compared with those who are not, ceteris paribus. This dissertation contributes to the state of knowledge by extending the concept of comparative optimism to entrepreneurial decision making; it also deepens understanding of the cognitive process of entrepreneurial opportunity evaluation in uncertain conditions. To the best of my knowledge, it is the first application of the concept of comparative optimism to an empirical study of the process of entrepreneurial opportunity evaluation in uncertain situations. This study may have pedagogical value too, by introducing comparative optimism as a significant factor for business school students. Finally, the practical value of this study lies in the predictability of comparative optimism. An individual evaluates a new business opportunity by comparing estimates of success with those of a relevant comparison group, so selecting a particular comparison group determines comparative optimism, making it predictable. Applying comparative optimism in turn may improve decision-making processes.
- Subject
- entrepreneurial opportunity evaluation; comparative optimism; uncertain conditions
- Identifier
- http://hdl.handle.net/1959.13/1357401
- Identifier
- uon:31920
- Rights
- Copyright 2018 Derek Chun-kit Yuen
- Language
- eng
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | ATTACHMENT01 | Thesis | 3 MB | Adobe Acrobat PDF | View Details Download | ||
| View Details Download | ATTACHMENT02 | Abstract | 281 KB | Adobe Acrobat PDF | View Details Download |