Document Type

Poster

Journal/Book Title/Conference

Research On Capitol Hill 2014

Publication Date

1-30-2014

Faculty Mentor

Daniel Holland

Abstract

Delay discounting impacts every decision a human makes when given the option of a sooner or a later receipt of a reward. This tendency results in individuals giving up bigger, later rewards for smaller, sooner ones. However, individuals differ in their level of discounting according to their innate tendency and the situation. For example, some individuals naturally discount future rewards more, resulting in preferring even smaller rewards sooner. Because delay discounting affects such a broad spectrum of decision making, the authors hypothesized that delay discounting affects when, or if, an individual intends on starting a business. If an individual starts too soon, it will affect the success of the business. To test the hypothesis, we analyzed the relationship between delay discounting and entrepreneurial intentions. To measure the discounting, we examined participant’s preferences regarding a series of scenarios of a smaller, sooner versus a larger, later reward. The results indicated that higher levels of delay discounting significantly increased the likelihood of intending to start a business within five years. It does not, however, increase the likelihood of intending to start a business in general. The findings suggest that some failed business ventures may be a result of high delay discounting.

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