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          Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices


          Saras Sarasvathy Stuart Read Nick Dew Rob Wiltbank

          In support of theory, this study demonstrates that entrepreneurial experts frame decisions using an โ€œeffectualโ€ logic (identify more potential markets, focus more on building the venture as a whole, pay less attention to predictive information, worry more about making do with resources on hand to invest only what they could afford to lose, and emphasize stitching together networks of partnerships); while novices use a โ€œpredictive frameโ€ and tend to โ€œgo by the textbook.โ€ We asked 27 expert entrepreneurs and 3 7 MBA students to think aloud continuously as they solved typical decision-making problems in creating a new venture. Transcriptions were analyzed using methods from cognitive science. Results showed that expert entrepreneurs framed problems in a dramatically different way than MBA students. Published by Elsevier Inc.

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