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Title: Experimentation and the Returns to Entrepreneurship
Resulting in 1 citation.
1. Manso, Gustavo
Experimentation and the Returns to Entrepreneurship
Working Paper, Social Science Research Network, October 2015.
Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2527034
Cohort(s): NLSY79
Publisher: Social Science Electronic Publishing, Inc.
Keyword(s): Earnings; Entrepreneurship; Life Course; Risk-Taking

Permission to reprint the abstract has not been received from the publisher.

Previous studies have argued that entrepreneurs earn less and bear more risk than salaried workers with otherwise similar characteristics. In a simple model of entrepreneurship, I show that estimates of mean and variance of returns to entrepreneurship used by these previous studies are biased, as they are based on cross-sectional data and fail to account for the option value of experimenting with new ideas. Using longitudinal data, I find patterns that are consistent with entrepreneurship as experimentation and returns to entrepreneurship that are more attractive than established by previous research.
Bibliography Citation
Manso, Gustavo. "Experimentation and the Returns to Entrepreneurship." Working Paper, Social Science Research Network, October 2015.