In the heat of the game

Research Paper Title:

“In the heat of the game: Analogical abduction in a pragmatist account of entrepreneurial reasoning”

Authors:

Anastasia Sergeeva (Rotterdam School of Management)
Akhil Bhardwaj (Tilburg School of Economics and Management)
Dimo Dimov (University of Bath)

Background:

People can adopt two distinct, complementary stances to relate to the world. As players, the authors imagine a way the world could be and aim to change it in line with our visions. As analysts, the authors focus on the world as something settled and aim to explain its facts. In this paper, the researchers shift the entrepreneurship conversation to new ground. Entrepreneurs are players when they deliberate and act; and analysts when they reflect and learn. The ability to toggle smoothly between the two stances is essential for any entrepreneur. The authors propose a process model via which this toggling between two stances unfolds. The process model is centered on analogical abduction as a key cognitive mechanism that enables entrepreneurs to conjecture new "opportunities" and triggers entrepreneurial learning and action.

Hypothesis:

1. Entrepreneurs use analogical abduction to conjecture an "opportunity". Premise 1: Conjecture A regarding attribute X worked in source domain S1. Premise 2: Target domain S2 is like source domain S1 on attribute X. D*.Conclusion: Hence A*, an analogue of A from source domain S1, is likely to work in target domain S2 to achieve desired outcome

2. Relative to less distant analogies, more distant analogies require commitment to more rounds and scope of recalibration.

3. Feedback indicating a relatively minor deviation from the intended outcome warrants engaging in single loop learning to revise the operationalization of the analogy underpinning the pursued “opportunity.”

4. Feedback indicating a major deviation from the intended outcome warrants engaging in double loop learning to shift the level of abstraction of the analogy underpinning the pursued “opportunity.”

5. Feedback indicating infeasibility of the intended outcome warrants engaging in triple loop learning to critically re- evaluate the pursued “opportunity.”

6. To reduce the potentially harmful effects of force-fitting anomalies into existing mental schemas, entrepreneurs with higher expertise in the source domain as compared to the target domain ought to carefully seek feedback with regards to the analogy and its operationalization.

Conclusion:

In this paper, the authors posit that there is a difference between retrospectively assessed opportunities that become obvious after entrepreneurs have acted upon them, and prospectively envisioned “opportunities” that might not coincide with actual states of the world, but provide entrepreneurs with a basis for action. The authors suggest that to understand entrepreneurial reasoning and action, scholars should explore cognitive mechanisms that enable entrepreneurs to conceive such “opportunities.” The researchers propose one such mechanism, centered on analogical abduction that enables entrepreneurs familiar with a causal relationship observed in one domain to conjecture that a similar causal relationship will work in another domain (see proposition 1 for the logical form of analogical abduction in the context of entrepreneurship). Acting on this conjecture as if it is true launches the process of learning from feedback from the world and gradual recalibration of the analogy undergirding entrepreneurial venture. The authors provide action principles that can aid entrepreneurs in their recalibration efforts (see propositions 2-6).