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Prior-knowledge and opportunity identification

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  • Jason Arentz
  • Frederic Sautet
  • Virgil Storr

Abstract

An entrepreneur’s prior knowledge and experience play a critical role in his ability to identify and exploit entrepreneurial opportunities. Although entrepreneurship research has acknowledged the role that prior information and prior knowledge play in opportunity recognition, few studies have explored their role in entrepreneurial discovery. We test the role of a particular prior knowledge in entrepreneurial discovery within a laboratory setting. Participants were randomly assigned to one of two treatment groups. Those in the propitious treatment were given prior knowledge that oriented them toward the arbitrage opportunity within the experiment, and those in the unpropitious treatment were given prior knowledge that oriented them away. As hypothesized, those in the propitious treatment were significantly more likely to discover the arbitrage opportunity. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Jason Arentz & Frederic Sautet & Virgil Storr, 2013. "Prior-knowledge and opportunity identification," Small Business Economics, Springer, vol. 41(2), pages 461-478, August.
    • Handle: RePEc:kap:sbusec:v:41:y:2013:i:2:p:461-478
    DOI: 10.1007/s11187-012-9437-9
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    2. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144, Edward Elgar Publishing.
    3. Hsu, Dan K. & Burmeister-Lamp, Katrin & Simmons, Sharon A. & Foo, Maw-Der & Hong, Michelle C. & Pipes, Jesse D., 2019. "“I know I can, but I don't fit”: Perceived fit, self-efficacy, and entrepreneurial intention," Journal of Business Venturing, Elsevier, vol. 34(2), pages 311-326.
    4. Marie Gomez Breysse, 2016. "L'entrepreneur « lifestyle »," Post-Print hal-01995343, HAL.
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    8. Simon Parker, 2014. "Who become serial and portfolio entrepreneurs?," Small Business Economics, Springer, vol. 43(4), pages 887-898, December.
    9. Jing Fan & Jiafu Su & Stavros Sindakis, 2024. "Customer Need Knowledge Facilitates Market Opportunity Recognition Through Absorptive Capacity and Technological Knowledge: Evidence from the IT Sector in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2192-2217, March.
    10. Vandor, Peter & Franke, Nikolaus, 2016. "See Paris and… found a business? The impact of cross-cultural experience on opportunity recognition capabilities," Journal of Business Venturing, Elsevier, vol. 31(4), pages 388-407.
    11. Gina Santos & Carla S. Marques & João J. M. Ferreira, 2018. "What are the antecedents of women’s entrepreneurial orientation?," International Entrepreneurship and Management Journal, Springer, vol. 14(4), pages 807-821, December.
    12. Vatankhah, Sanaz & Bamshad, Vahideh & Altinay, Levent & De Vita, Glauco, 2023. "Understanding business model development through the lens of complexity theory: Enablers and barriers," Journal of Business Research, Elsevier, vol. 155(PA).
    13. Yongchun Huang & Shangshuo Wu & Chengmeng Chen & Chen Zou & Anqi Pan, 2024. "Similar but yet different: individual cognitive traits and family contingencies as antecedents of intrapreneurship and self-employment," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    14. Jing Xia & Wei Liu & Sang-Bing Tsai & Guodong Li & Chien-Chi Chu & Kai Wang, 2018. "A System Dynamics Framework for Academic Entrepreneurship," Sustainability, MDPI, vol. 10(7), pages 1-25, July.
    15. Rui Zhang & Changxu Ji & Wenhuan Zhao & Ziyang Chen, 2024. "Analysis of the Factors Influencing the Knowledge Transfer to Villagers Working in Rural Tourism: a Multiple-Case Study in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 3551-3599, March.
    16. D. Cagno & A. Galliera & W. Güth & N. Pace & L. Panaccione, 2017. "Experience and gender effects in acquisition experiment with value messages," Small Business Economics, Springer, vol. 48(1), pages 71-97, January.
    17. Virgil Henry Storr & Stefanie Haeffele-Balch & Laura E. Grube, 2015. "Community Revival in the Wake of Disaster," Perspectives from Social Economics, Palgrave Macmillan, number 978-1-137-31489-5, June.
    18. Frederic Sautet, 2018. "The battle for the essence of entrepreneurship," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(1), pages 123-139, March.
    19. Shoaib Ali & Farooq Azam & Hafiz Muhammad Naveed & Muneeba Qayyum & Naveed Ahmed, 2020. "Impact of Bricolage on Organizational Innovation Through Recognition of Opportunities," Business Management and Strategy, Macrothink Institute, vol. 11(2), pages 55-78, December.

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    More about this item

    Keywords

    Alertness; Discovery; Entrepreneurship; Opportunity; Prior knowledge; D80; L26;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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