Monday, August 30, 2010
Risk-Taking and the Entrepreneur Brain
Risk-taking and impulsivity usually conjures up talk of ADHD, substance abuse or deliquency, but higher levels of risk-taking and impulsivity also correlated with higher likelihood of being an entrepreneur rather than a manager.
On a test of cognitive flexibility (Tower of London), entrepreneurs were just as likely as managers to score high. And on the Gamble task, both managers and entrepreneurs were able to to make good decisions 95% of the time.
But where entrepreneurs differed from managers is on "hot" or risky decisions in which they had to risk a greater portion of their earnings in order to win bigger. On these high reward-high punishment decisions, managers were risk-averse.
"Entrepreneurs demonstrate creativity through the development of positive financial opportunities for society as well as themselves. Although we know little about the psychopathological ‘dark side’ of entrepreneurship10, we would argue that the effects seen with our gambling task reflect functional impulsivity11, a subtype of impulsiveness that may enable impulsive individuals to capitalize on environmental niches. This functional impulsiveness of entrepreneurs combined with enhanced cognitive flexibility is a winning combination."
So the question is - when we see bright and creative impulsive children, are we really thinking, wow these kids would make great entrepreneurs...
Innovative Brain - Nature pdf