Effectuation Publications Library

          Access Journal Articles and Chapters Referencing Effectuation 

          Welcome to the Publications Library

          You can search, filter and access papers and abstracts below.

          Have a paper to submit?  Go Here

          Entrepreneurial Optimism in the Market for Technological Inventions


          Gary Dushnitsky

          How do potentially optimistic entrepreneurs attract prospective investors? We investigate an entrepreneurโ€™s decision to pursue either disclosure?where investors inspect the invention?or a contingent payment scheme (CPS) offer (e.g., salary deferral, royalty-based license)?where an inventionโ€™s value is inferred from the entrepreneurโ€™s willingness to make her pay contingent on the inventionโ€™s success. Using a parsimonious model, we highlight the role of optimism and demonstrate that it only affects CPS ex post. As a result, a novel trade-off unfolds ex ante: In choosing an action that maximizes the valuation of the invention, a moderately wealthy entrepreneur weighs optimism discount (affecting CPS) versus imitation discount (affecting disclosure). More broadly, the paper advances a view of entrepreneurs as optimists, thus departing from the prevailing approach, which characterizes entrepreneurs as opportunistic individuals who consciously pursue self-serving goals.

          PDF Download



          Submit A Paper to Expand the Dialogue