Entrepreneurial Risk Taking Is Related to Mental Imagery: A Fresh Look at the Old Issue of Entrepreneurship and Risk

Abstract

This paper contributes to the debate concerning determinants of willingness to take entrepreneurial risks and proposes a new approach to this issue. Our theoretical model predicts that entrepreneurs differ from non‐entrepreneurs in their willingness to accept business risks because the former produce more vivid and more positive mental images of the consequences of risk taking than the latter. We investigated the psychological processes behind willingness to take business and non‐business risks in groups of entrepreneurs and non‐entrepreneurs. First, we measured basic risk attitudes. Next, participants were presented with risky scenarios and asked to: (1) produce mental images; (2) evaluate their positivity and vividness; and (3) assess fearfulness evoked by the scenarios as well as risk level and willingness to take risk. Entrepreneurs did not differ from non‐entrepreneurs in either their basic risk attitudes or willingness to take non‐business risks. However, entrepreneurs declared a greater readiness to take business risks and produced more positive and vivid mental images of business risks. We found that an indirect effect of vividness of mental imagery on declared business risk taking only occurred for entrepreneurs. On a theoretical level, our results show that mental imagery might determine entrepreneurs’ willingness to take business risk.