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| Topic: |
History
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| Number of pages / Number of words: |
5 / 1305 |
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Many, many people face this same "heads I win, tails I don't lose much" situation, yet only a handful become entrepreneurs. Bhide believes that ambiguity aversion discourages many would-be entrepreneurs. Most successful entrepreneurs face uncertainty on all aspects of their business, with only a minority having written a detailed business plan, and those probably only in response to an education system that teaches business plans are necessary to starting a business (see chart below) (Bhide 16)...
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Bhide defines ambiguity as known-to-be missing information, which includes missing information about probability distributions. Founding a company puts people in situations where nothing is known with certainty and even the probabilities of outcomes are not known. Experiments by Becker and Brownson have shown that ambiguity is a significant deterrent for many individuals and is uncorrelated with risk...
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