Entrepreneursiph In Romania. A Behavioral Economics Perspective

Economics provides insight into how entrepreneurship influences growth and development and, on the other hand, how the macro structure of a region or country impacts the type and abundance of entrepreneurship. Economic analysis provides insights for scholars, guides practitioners and policymakers. From a broader perspective, economic theories guide the understanding of human behaviors and the constant quest toward realization, comprehension and improvement of human condition. Moreover, behavioral economics combines insights of psychology, sociology and economics in trying to better understand and predict human decision-making. At the intersection of economic studies with social sciences, behavioral economics succeeds to demonstrate, using laboratory tests and experiments, that on a shorter term people are quite capable to perform profitable economic computations and adopt rational behaviors, but on a long term run they easily become fallible in performing rational mental accounting and are vulnerable to several factors such as emotions, certain mass-manipulation techniques, lack of self control or procrastination, etc. Extended research in the field of behavioral economics reports many other various behavioral anomalies that may have the ability to explain seemingly irrational and unpredictable responses of individuals, in general, and entrepreneurs, in particular – especially when finding themselves in conditions of risk, uncertainty or incomplete information. Furthermore, the elevated consistency of these abnormalities suggests that they are divergent only to our traditional models, but that they could otherwise be the norm. The present article seeks to explain how such insights from behavioral economics may help us better understand and enhance our perspective on entrepreneurship, what are some of the most frequent biases characteristic to entrepreneurial behavior and decision-making, accounting as most notable for the field of entrepreneurship, biases like overconfidence, optimism, mental accounting, anchoring, uncertainty, etc. Using Global Entrepreneurship Monitor (GEM) data 2011 to 2013 the current research also present a brief behavioral perspective on the Romanian entrepreneurial environment, the profile of the Romanian entrepreneur, the motivations and various other factors such as demographics, age, education, etc. that have an impact on the decision of becoming an entrepreneur. The paper also offers a few succinct explanations and suggestions on how recent findings in behavioral economics could boost the entrepreneurship driven behavior observed.