What’s better: a higher volume of more impulsive and error prone decisions and actions, or a lower volume that is more accurate? This tradeoff has received extensive scholarly attention, but not in entrepreneurship, although the tradeoff is salient in this context. We build an agent-based simulation model, validated with PSED data, to examine the conditions under which impulsivity is (mal)adaptive. Our experimental results suggest that impulsive entrepreneurs are relatively less likely to successfully start a business irrespective of environmental uncertainty or munificence. However, of the entrepreneurs that emerge, the impulsive ones show somewhat larger growth on average and are four times more likely to achieve outlier growth. Thus, it seems that impulsivity has strategic utility for growth, but not organizational emergence.
Lerner, Daniel A.; Crawdford, G.; Bort, James; and Wiklund, Johan
"SPEED VERSUS ACCURACY: EXPERIMENTALLY MODELING THE STRATEGIC UTILITY OF IMPULSIVITY IN ENTREPRENEURSHIP,"
Frontiers of Entrepreneurship Research: Vol. 37
, Article 3.
Available at: https://digitalknowledge.babson.edu/fer/vol37/iss3/3