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Estudios de economía
versión On-line ISSN 0718-5286
Estudios de Economía vol.45 no.2 Santiago dic. 2018
http://dx.doi.org/10.4067/S0718-52862018000200231
Artículos
The endowment effect on entrepreneurs: A risky attachment
El efecto dotación en emprendedores: Un apego muy riesgoso
1Colombia. Cámara de Comercio de Cali Correo electrónico: iecheverry@ccc.org.co
2Colombia. Inter-American Development Bank Correo electrónico: sreyes@iadb.org
This paper presents evidence on the role of the endowment effect in shaping the risk-taking behavior of entrepreneurs, and how the potential of losing their firms lead them to take higher risks. This study uses an experimental design with 466 entrepreneurs in Cali, Colombia. Results show that entrepreneurs are more likely to accept riskier bets when those are related to the possession of their companies than in non-framed lotteries. The data shows that the existence of the endowment effect increases the certainty equivalent of a lottery, for the median entrepreneur, by 36.5%. This could explain why many entrepreneurs prefer to continue operating their underperforming firms, as well as why many entrepreneurs overvalue their firms during investment processes. This paper presents an alternate view on the drivers behind entrepreneurs’ risk-taking behavior and opens a door for future research on the role of biases on entrepreneurs’ decision-making processes.
Keywords: Endowment effect; cognitive biases; entrepreneurship; risk behavior; investment decisions; experimental design
Este documento presenta evidencia acerca del papel del efecto de dotación en el comportamiento de riesgo de los emprendedores, y cómo el potencial de perder sus empresas los lleva a asumir mayores riesgos. Este estudio utiliza un diseño experimental con 466 emprendedores en Cali, Colombia. Los resultados muestran que los emprendedores son más propensos a aceptar apuestas más arriesgadas cuando estas están relacionadas con la posesión de sus compañías, que en loterías no enmarcadas en este contexto. Los datos muestran que la existencia del efecto de dotación aumenta el equivalente de certeza de una lotería, para el emprendedor medio, en 36,5%. Esto podría explicar por qué muchos empresarios prefieren continuar operando sus empresas de bajo rendimiento, y también por qué muchos emprendedores sobrevaloran sus empresas durante los procesos de inversión. Este documento presenta una visión alternativa respecto de los factores detrás del comportamiento de riesgo de los emprendedores, y abre la puerta a futuras investigaciones del papel de los sesgos en los procesos de toma de decisiones empresariales.
Palabras clave: Efecto dotación; sesgos cognitivos; emprendimiento; comportamiento de riesgo; decisiones de inversión; diseño experimental
Acknowledgment
The authors that contributed to this article did it in their personal capacity. The views expressed are their own and do not necessarily represent the views of their Institutions. This research was possible thanks to the financing of the Cali Chamber of Commerce, as part of its knowledge creation strategy. We would like to thank the valuable comments of Esteban Piedrahita, Alyssa Huberts, Luis Omar Herrera and the attendants to the seminars held at the Cali Chamber of Commerce and the First Conference of the Latin American Network on the Economics of Innovation and Entrepreneurship organized by Inter-American Development Bank. Also, we would like to thank Marcela Torres and Sergio Sierra for their excellent research assistance.
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Received: October 16, 2017; Accepted: February 18, 2018
Este es un artículo publicado en acceso abierto bajo una licencia Creative Commons
