Entrepreunarial Decision Making under Ambiguity : Experimental Evidence on the impact of Overconfidence.

Summary Entrepreneurship researchers have concluded that overconfidence may play a role in entrepreneurial decisions. While informative, this research offers only limited explanations of the mechanisms through which overconfidence contributes to observed behavior. Furthermore, important aspects of research on uncertainty and ambiguity, which are quintessential to entrepreneurial activity, are partially addressed, whereas most studies focus on risk. My dissertation focuses on entrepreneurs' attitudes toward ambiguity and the impact of overconfidence. Given this objective, I employ theories of ambiguity to design a number of experiments, each aimed at answering specific research questions, contributing to the overall theme of this thesis. My results suggest that overconfidence makes decision makers more prone to ambiguity, and both phenomena depend on context and probability. I also find that entrepreneurs are more optimistic than non-entrepreneurs when faced with decisions in situations of risk or ambiguity. That being said, entrepreneurs are more pessimistic in ambiguous situations than in risky ones, while non-entrepreneurs do not make a difference. The contribution of my work is to get entrepreneurs to do what they do best: decide under ambiguous conditions in a laboratory or in nature.