Trust behaviors of entrepreneurs and non-entrepreneurs

Research Paper Title:

“Trust, fast and slow: A comparison study of the trust behaviors of entrepreneurs and non-entrepreneurs”

Authors:

Qingqing Bi (University of Canterbury)
Wai Fong Boh (Nanyang Technological University)
Georgios Christopoulos (Nanyang Technological University)

Background:

“Do entrepreneurs and non-entrepreneurs differ?” is a classic question in entrepreneurship research. A recent study by Qingqing (Claire) Bi, Waifong Boh, and Georgios Christopoulos invite more than 500 participants (including entrepreneurs, professionals and managers) to play the Trust Game, and find entrepreneurs and non-entrepreneurs display different behavioral patterns. Entrepreneurs build trust more quickly, react more quickly to trust violations, and display faster trust recovery. Such behavioral differences can be attributed to the decision contexts faced by entrepreneurs and non-entrepreneurs, and the thinking frameworks they adopt. This study contributes to the cognitive and behavioral approach of entrepreneurship research and showcases how entrepreneurs make decisions when facing changing environments. The experimental evidence confirms that entrepreneurs relies on heuristics in decision making and tend to adopt effectuation logic in their thinking frameworks. The results also suggest that entrepreneurs can be stronger candidates for roles in companies that deal with risk or fast-paced decision making, as they are more alert than professionals and managers to changes.

Methodology:

Sample: 354 entrepreneurs, 105 professionals, 57 managers
Sample Size: 516
Analytical Approach: Regression

Hypothesis:

1. Entrepreneurs build trust more quickly than non-entrepreneurs.

2. Entrepreneurs' trust will decrease more quickly than non-entrepreneurs when faced with trust violations.

3. Entrepreneurs recover from trust violations by exhibiting increase of trust more quickly than non-entrepreneurs.

Results:

1. Entrepreneurs have different trust behaviors from non-entrepreneurs when facing changing environments.

2. Entrepreneurs build trust more quickly than non-entrepreneurs.

3. Entrepreneurs decrease trust more quickly when faced with trust violations.

4. Entrepreneurs recover more quickly from trust violations than non-entrepreneurs.

Conclusion:

This study reveals significant differences between entrepreneurs and non-entrepreneurs in decision-making processes related to trust development. The researchers find entrepreneurs adapt more quickly to changing environments than non-entrepreneurs, as they build trust more quickly, react more quickly to trust violations, and display faster trust recovery. Different decision contexts and thinking frameworks are claimed to be the underlying causes of such behavioral differences.