Small Business Economics

, Volume 41, Issue 2, pp 461–478 | Cite as

Prior-knowledge and opportunity identification

  • Jason Arentz
  • Frederic SautetEmail author
  • Virgil Storr


An entrepreneur’s prior knowledge and experience play a critical role in his ability to identify and exploit entrepreneurial opportunities. Although entrepreneurship research has acknowledged the role that prior information and prior knowledge play in opportunity recognition, few studies have explored their role in entrepreneurial discovery. We test the role of a particular prior knowledge in entrepreneurial discovery within a laboratory setting. Participants were randomly assigned to one of two treatment groups. Those in the propitious treatment were given prior knowledge that oriented them toward the arbitrage opportunity within the experiment, and those in the unpropitious treatment were given prior knowledge that oriented them away. As hypothesized, those in the propitious treatment were significantly more likely to discover the arbitrage opportunity.


Alertness Discovery Entrepreneurship Opportunity Prior knowledge 

JEL Classifications

D80 L26 


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Copyright information

© Springer Science+Business Media, LLC. 2012

Authors and Affiliations

  1. 1.Sam M. Walton College of BusinessUniversity of ArkansasFayettevilleUSA
  2. 2.Department of EconomicsCatholic University of AmericaWashington, DCUSA
  3. 3.Department of EconomicsGeorge Mason UniversityFairfaxUSA

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