How Too Much Confidence Can Benefit Entrepreneurs

Close up of a typewriter with the word "Entrepreneur" on the paper

Researchers have created a computational model to interpret decision-making, learning, and experiences that result in entrepreneurs’ success and failure in market entry and exit.

In short, they distilled the traits that lead an entrepreneur to get into, or out of, the startup business.

Innovations come and go. Entrepreneurs fail and move on. Researchers have spent decades empirically analyzing the process and people behind such startups and shutdowns, relative to confidence or overconfidence. But too much of that scholarship “(mis)attributed” mistakes to individual behavioral bias, according to a new study outlining the model.

Read more about the study, co-authored by Hart Posen of the University of Wisconsin–Madison: