Working Paper No. 1218

Entrepreneurial Optimism and Creative Destruction

Published: May 28, 2018Pages: 43Keywords: Uncertainty; Optimism; Entrepreneurial firms; Predation; Positive externalities; Automatic textual analysisJEL-codes: L20; L26; M20; O30

Entrepreneurial Optimism and Creative Destruction Lars Persson and Thomas Seiler


We provide empirical evidence that uncertainty (rather than risk) and optimism are distinctive characteristics of high-impact entrepreneurial firms (recently listed firms) relative to old, incumbent firms. Based on this evidence, we construct an entrepreneurial entry predation model with uncertainty.

We show that entrepreneurial optimism can mitigate problems associated with strong incumbents' attempts to protect markets using predatory threats. Entrepreneurial optimism can also create a strategic advantage for entrepreneurs since incumbents may react by being less aggressive in product market interactions, which will benefit not only the profitability of the entrepreneur's venture but also consumers via lower prices.

Lars Persson

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Global index of the sharing economy

Timbro SEI

2018 Bergh Funcke Wernberg - Timbro Sharing Economy Index-1fHemsidan.jpg

Andreas Bergh, IFN and Lund University, is one of the authors of this book. The Timbro Sharing Economy Index is the first global index of the sharing economy. The index has been compiled using traffic volume data and scraped data, and provides a unique insight into the driving factors behind the peer-to-peer economy.

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