Entrepreneurial risk-taking beyond bounded rationality : risk factors, cognitive biases and strategies of new technology ventures Citation for published version (APA): Podoynitsyna, K. S. (2008). Entrepreneurial risk-taking beyond bounded rationality : risk factors, cognitive biases and strategies of new technology ventures. Technische Universiteit Eindhoven. https://doi.org/10.6100/IR635533 DOI: 10.6100/IR635533 Document status and date: Published: 01/01/2008 Document Version: Publisher’s PDF, also known as Version of Record (includes final page, issue and volume numbers) Please check the document version of this publication: • A submitted manuscript is the version of the article upon submission and before peer-review. There can be important differences between the submitted version and the official published version of record. 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Sep. 2021 Entrepreneurial risk-taking beyond bounded rationality: Risk factors, cognitive biases and strategies of new technology ventures Ksenia Podoynitsyna CIP-DATA LIBRARY TECHNISCHE UNIVERSITEIT EINDHOVEN Podoynitsyna, Ksenia Sergeyevna Entrepreneurial risk-taking beyond bounded rationality: risk factors, cognitive biases and strategies of new technology ventures / by Ksenia Sergeyevna Podoynitsyna. - Eindhoven : Technische Universiteit Eindhoven, 2008. – Proefschrift. - ISBN 978-90-386-1280-5 NUR 801 Keywords: Entrepreneurship / New technology ventures / Success factors / Cognitive biases / Risk and uncertainty management strategies / Performance Entrepreneurial risk-taking beyond bounded rationality: Risk factors, cognitive biases and strategies of new technology ventures PROEFSCHRIFT ter verkrijging van de graad van doctor aan de Technische Universiteit Eindhoven, op gezag van de Rector Magnificus, prof.dr.ir. C.J. van Duijn, voor een commissie aangewezen door het College voor Promoties in het openbaar te verdedigen op woensdag 11 juni 2008 om 16.00 uur door Ksenia Sergeyevna Podoynitsyna geboren te Moskou, Rusland Dit proefschrift is goedgekeurd door de promotoren: prof.dr.ir. M.C.D.P. Weggeman en prof.dr. X.M. Song Copromotor: dr. J.D. van der Bij i Table of contents ACKNOWLEDGMENTS V CHAPTER 1 GENERAL INTRODUCTION 11 1.1 META -ANALYSIS OF SUCCESS FACTORS 12 1.2 THE MECHANISM OF ENTREPRENEURIAL RISK -TAKING 14 1.3 RISK AND UNCERTAINTY MANAGEMENT STRATEGIES 16 CHAPTER 2 META-ANALYSIS OF SUCCESS FACTORS 19 2.1 INTRODUCTION 20 2.2 DATA COLLECTION AND METHODOLOGY 21 2.2.1 Selection of studies as input for the analysis 22 2.2.2 Protocol for meta-analysis 23 2.3 ANALYSIS AND RESULTS 26 2.3.1 Success factors of technology ventures 26 2.3.2 Moderators 31 2.4 IDENTIFICATION OF HIGH -QUALITY MEASUREMENT SCALES 33 2.5 DISCUSSION AND FUTURE RESEARCH DIRECTIONS 34 2.5.1 Market and opportunity 36 2.5.2 Entrepreneurial team 37 2.5.3 Resources 38 2.6 LIMITATIONS 39 ii CHAPTER 3 THE MECHANISM OF ENTREPRENEURIAL RISK-TAKING 41 3.1 INTRODUCTION 42 3.2 THEORETICAL BACKGROUND 44 3.2.1 Dual process theory: Definitions and theoretical foundation 44 3.2.2 Heuristics and biases stream of research 45 3.3 CONCEPTUAL MODEL AND HYPOTHESES 46 3.3.1 Relationship between biases and risk-taking propensity 47 3.3.2 Relationship between the two systems and risk-taking propensity 52 3.3.3 Relationship between the two systems and biases 54 3.4 METHODOLOGY 55 3.4.1 Sample and data collection 55 3.4.2 Measurements 56 3.4.3 Analysis 60 3.5. RESULTS 63 3.6. DISCUSSION 66 3.6.1 Major research findings and theoretical implications 66 3.6.2 Managerial implications 69 3.6.3 Limitations 70 CHAPTER 4 RISK AND UNCERTAINTY MANAGEMENT STRATEGIES 73 4.1 INTRODUCTION 74 4.2 THEORETICAL FRAMEWORK 77 4.2.1 Traditional risk management strategies 77 4.2.2 Real options strategy 80 4.2.3 Performance consequences of risk management strategies 82 4.2.4 Moderator: Technology standards 85 4.2.5 Moderator: Network externalities 88 4.3 METHODOLOGY 90 4.3.1 Sample and data collection 90 4.3.2 Measurements 91 4.3.3 Analysis 92 iii 4.4 RESULTS 95 4.5 DISCUSSION 97 4.6 CONCLUSION 103 CHAPTER 5 GENERAL DISCUSSION 106 5.1 DISCUSSION OF CHAPTER 2: THE META -ANALYSIS OF SUCCESS FACTORS 107 5.1.1 Conclusions 107 5.1.2 Future directions of research 108 5.2 DISCUSSION OF CHAPTER 3: THE MECHANISM OF ENTREPRENEURIAL RISK -TAKING 111 5.2.1 Conclusions 111 5.2.2 Future directions of research 112 5.3 DISCUSSION OF CHAPTER 4: RISK AND UNCERTAINTY MANAGEMENT STRATEGIES 114 5.3.1 Conclusions 114 5.3.2 Future directions of research 114 5.4 FINAL REMARKS 116 REFERENCES 117 APPENDIX A: MEASURES 129 A2.1. SCALES OF THE MOST IMPORTANT META -FACTORS FROM CHAPTER 2 129 A3.1. CONSTRUCTS , MEASUREMENT ITEMS , AND CONSTRUCT RELIABILITIES FOR CHAPTER 3 131 A4.1. CONSTRUCTS , MEASUREMENT ITEMS , AND CONSTRUCT RELIABILITIES FOR CHAPTER 4 136 APPENDIX B: ADDITIONAL TABLES 138 B2.1. METHODOLOGICAL CHARACTERISTICS OF THE ARTICLES INCLUDED IN THE META - ANALYSIS 138 B2.2. PUBLICATION SOURCES OF THE STUDIES INCLUDED IN THIS META -ANALYSIS 141 B3.1. LISREL RESULTS FOR THE SYSTEMS -BIASES -RISK -TAKING MEDIATION (STANDARDIZED SOLUTION) 142 iv APPENDIX C: FORMULAS 143 C2.1. FORMULAS FOR VARIANCES CALCULATIONS 143 SHORT SUMMARY 145 ABOUT THE AUTHOR 149 ECIS DISSERTATION SERIES 151 v Acknowledgments The author would like to thank the alphabet for the letters it kindly provided. This year is very special for me since I happen to experience a double birth: that of my daughter and that of this thesis. Both of them can be seen as long-term projects characterized by high risk and uncertainty. Despite some similarities, one of the most important lessons I learned during the PhD is to never treat your work as your own child – otherwise you can never improve on it. I owe this and many other lessons to my supervisors. There have been a total of four of them in different phases of my PhD and it has been an honor of working with them all. My first first promoter, Joop Halman; I am looking back with great pleasure at the beginning of my PhD. You sparked my interest in science and I am grateful for your enthusiasm and insightful comments. My second first promoter, Mathieu Weggeman; thank you for reminding me of the importance of the practitioners view on scientific research. Your feedback allowed me to take an "outside view" on my work. My second promoter, Michael Song; thank you for giving me the freedom to choose the research paths I was interested in and for making sure that they were scientifically sound. Each discussion of our papers is a challenge I immensely enjoy – they are always unpredictable and stimulating. My daily supervisor, Hans van der Bij; I am truly thankful for your tremendous support and for sharing your knowledge with me. You helped me dare to make my own decisions, not the decisions that ought to be mine. Thank you for being always open for the crazy ideas I could come with and even accepting them so now and then. vi I am grateful to Aard Groen, Joop Halman, Rob Verbakel, Leo Verhoef en Mathieu Weggeman for helping me find "de proefkonijnen" for my case-studies and pre-tests of the two surveys. I am similarly indebted to the nearly 30 entrepreneurs who agreed to share their inspiring stories and answered my numerous questions. My gratitude to the PhD commission for this dissertation; Anthony Di Benedetto, Geert Duijsters and Mark Parry, thank you for evaluating this thesis and for your understanding when I had to move its defense date due to the problems in my pregnancy. I owe a lot of warm memories to the company of our PhD students: Ad, Bonnie, Deborah, Elise, Jeroen, Maurice, Michael, Michiel, Mirjam, Rebekka, Stephan and Vareska. I am thankful to the rest of our OSM colleagues who both helped me improve my Dutch during the lunch hours and helped me out scientifically whenever I needed their advice. The secretary room has been a social center of our group all the time, and it could not be possible without Bianca, Marion and Marjan. Julius Caesar, famous for his multitasking, would be jealous of your abilities to combine things! I am endlessly grateful to my parents for raising me who I am, for tinkling my curiosity and for being there whenever I needed their advice.