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Stereotypes about Successful Entrepreneurs

Author

Listed:
  • Victor Lyonnet
  • Léa Stern

Abstract

What comes to mind when thinking about a successful entrepreneur? Belief formation models suggest that what comes to mind is an oversimplified picture of the characteristics of successful entrepreneurs—that is, stereotypes about successful entrepreneurs. Using French administrative data on 48,767 new firms, we show that some characteristics are stereotypical of success and have distributions that can generate miscalibrated beliefs. To illustrate how stereotypical thinking can lead to biased assessments, we report the discrepancies between the implied fraction of successful entrepreneurs under Bayesian versus stereotypical thinking for several stereotypes. We discuss the consequences of stereotyping for venture capital allocation.

Suggested Citation

  • Victor Lyonnet & Léa Stern, 2023. "Stereotypes about Successful Entrepreneurs," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 186-190, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:186-90
    DOI: 10.1257/pandp.20231120
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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