Risky business: Comparing the opportunity evaluation decisions of social and commercial entrepreneurs

Via a choice-based conjoint experiment and Hierarchical Bayesian Analysis (HBA) of 2538 decisions from 141 entrepreneurs, we model opportunity evaluations as a utility maximizing response to identify and compare part-worth utilities for distinct levels of value capture and risk/uncertainty. Contrary to predictions from existing theories of the social entrepreneur, we find that social entrepreneurs are more risk averse and have less utility for uncertainty. Exploratory post-hoc analysis indicates that the risk aversion of social entrepreneurs is partly driven by lower collective efficacy, suggesting that social entrepreneurs conceptualize risk and uncertainty as an “other-regarding” construct that considers and affects additional stakeholders. Just as social entrepreneurs seek to maximize social value, they likewise construe the risk of loss through a social lens.