UNIVERSITÉ DE MONTRÉAL A MULTIDISCIPLINARY PERSPECTIVE ABOUT DECISION MAKING UNDER UNCERTAIN AND RISKY SITUATIONS: AN APPLICATION TO ENTREPRENEURSHIP CHRISTOPHE MONDIN DÉPARTEMENT DE MATHÉMATIQUES ET DE GÉNIE INDUSTRIEL ÉCOLE POLYTECHNIQUE DE MONTRÉAL MÉMOIRE PRÉSENTÉ EN VUE DE L’OBTENTION DU DIPLÔME DE MAÎTRISE ÈS SCIENCES APPLIQUÉES (GÉNIE INDUSTRIEL) JUILLET 2016 © Christophe Mondin, 2016. UNIVERSITÉ DE MONTRÉAL ÉCOLE POLYTECHNIQUE DE MONTRÉAL Ce mémoire intitulé : A MULTIDISCIPLINARY PERSPECTIVE ABOUT DECISION MAKING UNDER UNCERTAIN AND RISKY SITUATIONS: AN APPLICATION TO ENTREPRENEURSHIP présenté pour un mémoire : MONDIN Christophe en vue de l’obtention du diplôme de : Maîtrise ès sciences appliquées a été dûment accepté par le jury d’examen constitué de : M. JOANIS Marcelin, Ph. D., président Mme DE MARCELLIS-WARIN Nathalie, Doctorat, membre et directrice de recherche M. WARIN Thierry, Ph. D., membre et codirecteur de recherche M. ARMELLINI Fabiano, D. Sc., membre iii DEDICATION To all of my own, family, cousins, childhood and adulthood friends To all of my own, kind people I’ve met, people that know me well, To all of my own, people I’ve lost sight of and touch with, To all of my own, people that inhabit me To you, as a reader (good luck!), iv ACKNOWLEDGEMENTS First and foremost, I express my deep sense of gratitude to both of my supervisors for their inspiring guidance, scholarly inspiration and valuable criticisms throughout the course of this work, and in fact during my whole implication in Polytechnique Montreal. They inspired and supported me in my work from the very beginning and throughout periods of doubt. I arrived as an aspiring engineer and grew more complete and well-rounded, exploring, learning, expanding the horizon of my interests and curiosity. I am gratefully obliged to Polytechnique Montréal and the CIRANO for helping me to collect data necessary for the study, and welcoming me in their walls to pursue this work. I encountered passionate and helpful people, I’ve met inspiring students and considerate professors, and I benefited from the best auras, the most challenging projects and stirring people. I extend my sincere thanks especially to Carl St-Pierre for his help and support in the fulfilment of my work, a wizard among numbers. I thank my family members, friends, fellow students and colleagues for all their support (direct or indirect) and encouragement throughout the completion of my work: First my parents Anne-Pascale (she’d prefer Nanou) and Jérôme who, from across the Atlantic pond, always encouraged me and provided comfort and reassurance. It’s been long and sometimes tedious to be away. My sister Maureen was a soothing beacon here in Montreal, and a precious asset for my back-up plan which was to reach the stage and make mine Montreal’s show business (I somehow am funny, people tell me so). I also think about my grand-parents, they never had too much resent for me being this far away. I don’t think they ever really understood what I was doing as an engineer not dealing with loud steaming machinery, roaring furnaces in steelworks or building bridges, but that was just fine as long as I was happy. It is momentous for me to mention my closest friends, my fellows from La Tour, spread all around the world but everyday supportive, inspiring, and heart-warming. I wound up by chance among them a decade ago, and since then everything I’ve lived and done has dwelt on their reliable and beneficial influence. Special note to Eléonore, Elida (often vising!). Benjamin, Paul and lately Boris, my neighbours in North America. In Montreal or Cambridge, dancing with the electronic Devil on the Old Port during winter, braving the waves at Cape Cod, warding off the v grizzlies in Alaska, getting lost here and there, they provided a never-ending flow of inspiration, souvenirs, music, adventures, and last but not least meals. I think kindly about the other vessels of friendship that are Alison, Anaïs, Heather, Jennifer, Marie, Joulane, Rémi, and Vincent. A particular praise to all of my numerous and marvellous cousins, as well as their fabulous kin. If we are made of the fabric of which winds are woven, during my (too seldom) annual Christmas pit-stops in France you were always a warm and calm breeze of lovingness (or was that the effect of the Christmas food I felt?). A special tribute to the remarkable Sasha, an ecstatic soul worth a couple of millions of camels (as of the Cairo Mercantile Exchange rates of 2006). Scattered yet sturdy and vibrant memories in the past, and undoubtedly more laughs (and exasperation!) in the future. You still owe me several boxes of cookies! Paris has always been a little more nice place to stay, knowing I’d see your mug at least once (probably devouring a katsudon). Another particular shout-out to Nathan my old friend, an old warrior from the Outland and beyond. A genuine example that great friendships arise from happenstance. Lucas & Clément, words fail me to say how wonderful a lot of my memories are thanks to you. My visits in France were always too short, but I cherished our little evenings trying to make up for lost time around food from Boccacio. William was always orbiting around my entire stride in Montreal (or rather I was orbiting around the star), whether it be in Poly-Monde, PolyFinances or in CIRANO. Basically everywhere. It is staggering to think of what would have occurred if I had not crossed his path. My epic journey in Polytechnique would not have been the same without my cherished family of Poly-Monde. I had to run to get a shirt for the interview, I missed the very first meeting, I was the sole “maudit français” of the crew, and navigating for an entire year from Montreal to Sydney harbour with such an outstanding company was the experience I sought and found in Polytechnique. Countless hours, words, reports, laughs, pictures, visits, not to mention celebrations... What a long and wonderful journey it has been! I would not have swum so much in finance waters without the members of PolyFinances, they were inspiring buoys to keep my focus! It was a chance, an honour and a blessing to be part of the first two years of this committee and forge a now brilliant steam-rolling machine. I still vi ponder sometimes how they managed to set that gigantic circular table at Moody’s headquarters (among other things...). To complete the ‘trinity’, I am also grateful to the CCGP and its members, for additional great moments, lessons and inspiration. My mandate was a fortunate experience, allowing me to continue to work with great people and meet new friends and colleagues. Of course as a true maudit français, I did not have only Quebec acquaintances here. I saw the reasonably small group of frenchies grow bigger and better as time flew. Montreal always had a delightful print of my former school and all the bound memories with Simon, Marc-Alexandre and Elena. A special note to Allison and Eric, my mates thought ups and downs, lending an ear, a glass or a coffee cup. Another particular note to Agathe & Antoine, Jedi masters of the saucepan and the books. In school and outside of it I was cushioned with great friendships and coated my years with even more souvenirs. I can’t possibly name everyone guys, don’t blame me! In fact, let’s do this because I’m going to hear about it for ages: Aurore, Clémentine, Coco, Coline, Isabelle, Perrine, Constant, Fabien, Julian, Manu, Mathieu, Ulysse, and last but not least Victor. Now, now I really fear I’ve forgotten somebody. Last but not least (although…), a special thank to a special group of people, sometimes I call them my friends, sometimes I call them ‘tocards’, sometimes I don’t call them for months, sometimes I call them by odd and kind of fantastic names (they themselves have chosen). Countless hours of laughter, challenging ourselves and speaking nonsense as well. Thanks Thomas, Georges, Damien, Julien, Antoine, Jérémy, Anthony, Nicolas, Yann, Tancrède, Thomas. I’m very aware, humble and proud to have benefited from all the scientific knowledge I read over and over, inspiring and guiding my own path. Almost every day I encountered a new fascinating scientific story leaving me in awe, to the bane of my friends (I would tell them everything I found fascinating – basically everything). I conceived this work as an extensive production on the subject of risk and all its extensions. My desire was for this work to be very complete and accessible for anyone without a background on any of the subject it tackles. I delved into the early understanding of how the mind work, from Aristotle until neuro-imaging showing colourful kaleidoscopes of brain areas sparking as we make decisions facing risk. Today, entrepreneurship and financial risk-taking can be linked to genetic factors and psychological traits, and the list of cognitive bias impairing (or helping) our decision mechanisms is well documented. It is vii flabbergasting how much there is to learn, and how much there is yet to discover. I think that all scientists crave for mystery and love not knowing. In that way I consider myself a very scientific person. This thesis is a product of all that I didn’t know. I have done nothing but sitting on the shoulders of giants. viii RÉSUMÉ Ce projet est une étude exploratoire sur les comportements face au risque et la prise de décision dans des contextes d’incertitude. Nous souhaitons étudier plus particulièrement l’orientation entrepreneuriale d’étudiants provenant de différentes institutions académiques (principalement montréalaises) et utiliser différents outils de mesures existant dans la littérature et qui intègrent les multiples facettes de l’attitude face au risque.