Too much or too little faith in success? Experimental Evidence from Colombian Entrepreneurs (Joint with Andres Rodriguez)
Working Paper 🔗] (Job Market Paper)

We study the tendency among aspiring opportunity entrepreneurs to incorrectly estimate their likelihood of success and its connection to high failure rates among entrepreneurs in Colombia. We test the relative roles of ambiguity preferences, confidence, and optimism and whether there are heterogeneities in these biases with regards to the true underlying potential for success as an entrepreneur. We recruit current, past, and aspiring Colombian entrepreneurs to participate in our online experiment. As part of the study, we simulate the decision to become an entrepreneur by having participants make an "entry decision" about playing an entrepreneurship-related game for stakes or taking a certain payment. We vary the available information to disentangle the potential behavioral biases leading to suboptimal entry decisions. We find a high degree of entry at the baseline, with over 80% of participants choosing to play the game for stakes across the board. Providing information about the expected likelihood of success encourages the lower potential participants to enter more, closing the slight gap between them and their higher potential counterparts at baseline. We find that providing information about the individual-specific skill-based success likelihood discourages some lower potential individuals, correcting for their over-confidence. Furthermore, we find that sharing information about the role of luck also discourages the lower potential participants, providing evidence against high levels of optimism or risk-seeking in this group.

Effects of Access to an Objective News Source on Public Awareness, Opinion, and Involvement in Politics: The Case of Hungary
[Working Paper 🔗] [Tables & Figures 🔗]

The paper studies the effects of a single news source not biased in favor of the Government becoming widely available when there was not one before. The paper uses the major change in the news structure of the RTL Klub TV channel from mainly covering soft news to an increased focus on domestic politics and Government-critical news. Unlike most of the existing literature on media bias, the paper does not reject the null hypothesis of no effects of the change on knowledgeability, engagement, and opinion about politics. However, the paper uncovers that already before the change, the RTL Klub evening news viewers were relatively more knowledgeable and engaged with politics and less supportive of the Government. Thus, the findings suggest that if the change had any effects, these effects were relatively small compared with the prior correlations. Additionally, the findings provide evidence against the claims that the change of the RTL Klub news led to a decline in support for the Government during the last three months of 2014. Based on the results of this paper, it seems likely that the US entry ban of certain public employees linked to potential corruption cases and its repercussions played a bigger role.

Keywords: Bias, Media, Information, Television, Public Opinion.

Research in Progress

Evaluating a Novel Approach for Expanding the Pool of Small and Growing Enterprises
(Working paper upon request) (Status: implementation)

Entrepreneurs are important drivers of development. Nevertheless, existing entrepreneur training programs had small and heterogeneous impacts. This project explores whether a mostly psychological intervention can make early-stage entrepreneurs believe in their abilities to improve in any skill and be able to actually do so thereby bridging the gap between the needs of developing country entrepreneurs and the often Silicon Valley-influenced expectations of accelerators. This project tests the viability of a psychological mindset change intervention outside of a formal educational environment, applied to financial literacy skills, and delivered online to India-based entrepreneurial individuals.

How to Best Leverage Personality Tests for Supporting Entrepreneurs in Developing Countries? - A Lab- In-The-Field Experiment
(Working paper upon request) (Status: implementation)

The study provides a methodological contribution to the circumstances under which personality tests can be used effectively in the context of supporting entrepreneurs in developing countries. It tests whether personality tests are valid in these contexts and assesses the degree to which individuals are able and willing to “fake” their personality test results. Furthermore, the study tests whether gender differences in honesty and stereotype threat affect outcomes of otherwise equally qualified individuals and evaluates the extent to which the use of high cognitive load can reduce “faking” and any gender-based disadvantage in the use of personality tests.


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