Risk Taking in Opportunity Evaluation

In spite of compelling advances in the notion of entrepreneurial opportunities in the past decade, the construct still undergo serious critics such as being metaphorical and not literal. One paramount reason for this shortfall is due to lack of instruments to evaluate objectively varieties of components of business opportunities such as risk and uncertainty. The process of discovering an opportunity starts from a subjective process of recognition, and it then involves further evaluation such as risk assessment to transmit it to an objective value. However, we know little about how the transformation from subjective to the objective state takes place within opportunity evaluation. Using Risky Framing concept, we contribute to this gap in knowledge. We use survey data of proxy entrepreneurs and examine their responses against a control group of non-entrepreneurs. Results show that the both groups adopt different risk levels when they confront opportunity scenarios. In addition, the risk levels adopted by the entrepreneurs was significantly greater than their non-entrepreneur counterparts. These findings provide new insights in the process of entrepreneurial alertness. The results discussed and implications for the future contributions are provided.