Cognitive mechanisms in the decision to become an entrepreneur: The role of counterfactual thinking and the experience of regret

It was reasoned that several cognitive factors may play a role in the initial decision to become an entrepreneur. One of these is counterfactual thinking - the tendency to imagine "what might have been" in a given situation if an individual had acted differently in it. It was hypothesized that entrepreneurs would be more likely than other persons to engage in such thought with respect to missed opportunities, and would therefore experience stronger feelings of regret over such outcomes. The desire to avoid or minimize feelings of regret would then contribute to entrepreneurs' willingness to "take the plunge" and become entrepreneurs. To test these hypotheses, three groups of participants - actual entrepreneurs, potential entrepreneurs, and persons with little interest in playing this role - rated the frequency with which they thought about missed opportunities and the amount of regret this caused them to experience. Contrary to predictions, entrepreneurs did not engage in such counterfactual thinking more often then other persons and actually reported weaker regrets over missed opportunities. However, as expected, they reported engaging in an active search for new opportunities significantly more frequently than other individuals. These findings were interpreted as stemming from the fact that entrepreneurs, more than other persons, recognize that new opportunities abound; hence, they are less likely to torment themselves with regrets over missed opportunities, and more likely to focus on identifying other, as yet unexploited, opportunities.