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Understanding the Role of Perceptions in Opportunity Evaluation: A Discrete Choice Experiment

Author

Listed:
  • Bylund Per L.

    (School of Entrepreneurship, Oklahoma State University, 424 Business Building, Stillwater, OK 74078-1010, USA)

  • Malone Trey

    (Department of Agricultural, Food, and Resource Economics, Michigan State College of Agriculture and Applied Science, 306 Morrill Hall of Agriculture, East Lansing, MI 48824-1312, USA)

Abstract

We construct a discrete choice experiment to study opportunity evaluation by entrepreneurs. This new method in entrepreneurship studies allows us to measure entrepreneurs’ utility functions and thereby their perceptions of opportunity. Consequently, we produce empirical evidence for how entrepreneurs evaluate opportunities beyond the objective facts and find two types of entrepreneurs with different evaluative behavior that cannot be explained by situational or demographic differences. We contribute to the opportunity evaluation literature by measuring perceptions, provide theoretical argument and present empirical evidence for heterogeneity among entrepreneurs, and introduce new methods that allow for more nuanced empirical analyses of entrepreneurial decision-making.

Suggested Citation

  • Bylund Per L. & Malone Trey, 2024. "Understanding the Role of Perceptions in Opportunity Evaluation: A Discrete Choice Experiment," Entrepreneurship Research Journal, De Gruyter, vol. 14(2), pages 759-796, April.
    • Handle: RePEc:bpj:erjour:v:14:y:2024:i:2:p:759-796:n:9
    DOI: 10.1515/erj-2021-0232
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