Abstract

A central tenet of the entrepreneurship literature is that entrepreneurs behave in an uncertain world. All entrepreneurial action, whether embodied as the entering of new markets, the release of a new product or service, altering existing production methods, or founding a new venture, is subject to uncertainty. However, prior research looking into entrepreneurial decision-making has primarily constructed uncertainty as a unidimensional variable, thus ignoring inherent differences in the types of uncertainty entrepreneurs face and the subsequent effects of these on decisions. This is a major limitation to our understanding of entrepreneurs’ decision criteria. In this paper, we unpack the varying effects of uncertainty on software entrepreneurs’ new product launch decisions. We build upon Milliken’s (1987) characterizations of three types of uncertainty (i.e. state, effect, and response uncertainty) and the magnitude of new product launch in these entrepreneurial decisions.

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