Oct 4, 2018 03:02 AM
http://www.cardiff.ac.uk/news/view/12975...essimistic
EXCERPT: Optimistic thinking is leading people to set up businesses that have no realistic prospect of financial success according to new research from the University of Bath, Cardiff University and the London School of Economics and Political Science. The study, which tracked individuals as they move from paid employment to setting up their own business venture, goes some way to explaining why only fifty percent of businesses in the UK survive their first five years. Researchers found that business owners with above average optimism earned 30 percent less than those with below average optimism, and substantially less than they would have earned if they had remained an employee.
Published in the European Economic Review, the study explores the financial consequences of becoming an entrepreneur for optimists - people with a tendency to overestimate their chances of doing well and underestimate their probability of failure.
Despite entrepreneurs earning on average less, working longer hours and bearing more risk than their counterparts in paid employment, optimists are more likely than most to mistakenly think they have found a good business opportunity and that they have what it takes to exploit it successfully. Realists and pessimists are less likely to proceed with unpromising entrepreneurial ventures....
MORE: http://www.cardiff.ac.uk/news/view/12975...essimistic
EXCERPT: Optimistic thinking is leading people to set up businesses that have no realistic prospect of financial success according to new research from the University of Bath, Cardiff University and the London School of Economics and Political Science. The study, which tracked individuals as they move from paid employment to setting up their own business venture, goes some way to explaining why only fifty percent of businesses in the UK survive their first five years. Researchers found that business owners with above average optimism earned 30 percent less than those with below average optimism, and substantially less than they would have earned if they had remained an employee.
Published in the European Economic Review, the study explores the financial consequences of becoming an entrepreneur for optimists - people with a tendency to overestimate their chances of doing well and underestimate their probability of failure.
Despite entrepreneurs earning on average less, working longer hours and bearing more risk than their counterparts in paid employment, optimists are more likely than most to mistakenly think they have found a good business opportunity and that they have what it takes to exploit it successfully. Realists and pessimists are less likely to proceed with unpromising entrepreneurial ventures....
MORE: http://www.cardiff.ac.uk/news/view/12975...essimistic
