Scholars (Spivak, Haynie, & McKelvie, 2014; Simmons et al., 2016) have endeavored to investigate a phenomenon that many failed entrepreneurs reentered entrepreneurship (Jenkins, Wiklund, & Brundin, 2014). An explanation is provided by prospect theory (Kahneman & Tversky, 1979) – these entrepreneurs regard the subsequent entrepreneurship choice as an opportunity to regain the wealth they have lost from the business failure. However, some failed entrepreneurs did not reenter (Jenkins et al., 2014). What makes this difference?
To answer this question, the current research integrates the concept of hope (Lazarus, 1999; Snyder, 2002) into prospect theory. The rationale for doing so is grounded in the prospect theory literature that suggests that people in the loss condition would choose a risky option in the hope (e.g., Levy, 1996; Brockner, 1992; Barberis, 2013) of winning back their loss (McDermott, 2004; Shoemaker, 2003). This research thus draws on the literature of hope (Lazarus, 1999), defined as “a positive emotion that reflects the extent to which one yearns for a possible (if uncertain) goal-congruent outcome” (Reimann et al., 2014; p. 350), to study the reentry intention of failed entrepreneurs. Specifically, we propose the positive relationship between the amount of loss and the reentry intention and the mediating role of hope to that relationship.
Hsu, Dan K.
"FAILURE, HOPE, AND REENTRY: EXAMINING THE PROSPECT THEORY REASONING FOR SERIAL ENTREPRENEURS (SUMMARY),"
Frontiers of Entrepreneurship Research: Vol. 37
, Article 5.
Available at: https://digitalknowledge.babson.edu/fer/vol37/iss4/5