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Advice and the Bayesian Entrepreneur

By: Susan Cohen and Rembrand Koning
  • Format:Print
  • | Language:English
  • | Pages:16
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Abstract

Bayesian entrepreneurship starts from the premise that entrepreneurs’ beliefs guide their theorizing, experimentation, and choices (Agrawal et al., n.d.). Since each entrepreneur has unique beliefs based on their own set of past experiences, cognitive ability, and disposition, individual entrepreneurs are likely to take different actions even if they stumble upon the same entrepreneurial opportunity. Beyond initial beliefs, Bayesian entrepreneurship is rooted in the idea that experimentation can be a valuable tool to update beliefs and improve choices. From the Bayesian perspective, any purposeful information gathering activity testing the promise of a new venture or strategy—from seeking advice to A/B tests—can be treated as a Bayesian experiment (Kerr, Nanda, and Rhodes-Kropf 2014; Agrawal et al., n.d.).

Keywords

Entrepreneurship; Decision Choices and Conditions

Citation

Cohen, Susan, and Rembrand Koning. "Advice and the Bayesian Entrepreneur." Harvard Business School Working Paper, No. 25-029, November 2024.

About The Author

Rembrand M. Koning

Entrepreneurial Management
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