Abstract

Effectuation is developed as a theory about how expert entrepreneurs make decisions in situations characterized with uncertainty. While the theory has gained prominence, the relationship between expertise, uncertainty and effectuation has not been critically examined. This paper addresses this gap and challenges the assumption that effectuation is mainly a behavior experts undertake under uncertainty through empirical testing. Contradictory to theoretical predictions, we find that expert entrepreneurs more often use causation, while novice entrepreneurs rely more on effectual principles. As expected, effectuation is used by entrepreneurs perceiving uncertainty. As expert entrepreneurs perceive less uncertainty, they are also less likely to use effectuation.

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