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Switch or persevere? The effects of experience and metacognition on persistence decisions

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Abstract

This paper extends the scholarly understanding of entrepreneurial persistence decisions by identifying individual-level constructs that moderate which decision criteria have the most influence on entrepreneurs’ persistence decisions. Prior research demonstrates that contextual factors, such as feedback through adversity and the attractiveness of opportunities in an entrepreneur’s environment, determine whether or not an entrepreneur will persist with their current venture. We contribute to this literature by theoretically proposing and empirically testing how individual differences in entrepreneurial experience, metacognitive experience, and metacognitive knowledge moderate which aspects of environmental information entrepreneurs pay the most attention to when deciding whether or not to persist. We test our proposed model using a conjoint experiment that allows for monitoring actual persistence decisions of 124 entrepreneurs. Results suggest that metacognitive knowledge influences persistence decisions primarily through altering the impact that probability of expected outcomes associated with potential alternatives has on entrepreneurs’ persistence decisions. Furthermore, the results provide evidence that more experienced entrepreneurs weigh financial returns and switching costs more heavily when making persistence decisions.

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Notes

  1. HLM and regression results to test for ordering effects are not included in the appendix, but can be provided upon request to the author.

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Authors and Affiliations

  1. Boise State University, 1910 University Drive, MBEB Office 2215, Boise, ID, 83725, USA

    Eric Shaunn Mattingly

  2. California State Polytechnic University, Pomona 3801 W. Temple Ave., COB Office 164-3057, Pomona, CA, 91768, USA

    Trayan N. Kushev

  3. College of Business, University of Louisville, Room 384, Louisville, KY, 40292, USA

    Manju K. Ahuja

  4. Missouri Western State University, 4525 Downs Dr., St. Joseph, MO, 64507, USA

    Dalong Ma

Authors
  1. Eric Shaunn Mattingly
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  2. Trayan N. Kushev
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  3. Manju K. Ahuja
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  4. Dalong Ma
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Correspondence to Eric Shaunn Mattingly.

Appendix

Appendix

A sample of scenarios

In this section, you will be presented with 8 hypothetical profiles of alternatives to your current business. While considering each profile, please assume the following:

  • Consider your primary business in which you spend the majority of your time.

  • Assume that you only have the resources to either continue with your current business OR change to the alternative, but NOT both.

  • Think of the alternative as operating in a similar industry and economy as your current business.

Financial Returns

HIGHER

for your current business than the alternative.

Switching Costs

LOW

 

Probability of Expected Outcomes

LOWER

for your current business than the alternative.

Non-financial Benefits

HIGHER

for your current business than the alternative.

Based on this scenario, how would you rate the likelihood that you would continue with your current business versus switching to the alternative?

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Mattingly, E.S., Kushev, T.N., Ahuja, M.K. et al. Switch or persevere? The effects of experience and metacognition on persistence decisions. Int Entrep Manag J 12, 1233–1263 (2016). https://doi.org/10.1007/s11365-016-0391-x

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