Notice of Prior Presentation: An earlier draft of this paper was presented at the 2006 Babson College Entrepreneurship Research Conference hosted by Indiana University in Bloomington, Indiana.
Beyond Simple Utility: Incentive Design and Trade-Offs for Corporate Employee-Entrepreneurs
Article first published online: 15 APR 2009
© 2009 Baylor University
Entrepreneurship Theory and Practice
Volume 34, Issue 1, pages 105–130, January 2010
How to Cite
Monsen, E., Patzelt, H. and Saxton, T. (2010), Beyond Simple Utility: Incentive Design and Trade-Offs for Corporate Employee-Entrepreneurs. Entrepreneurship Theory and Practice, 34: 105–130. doi: 10.1111/j.1540-6520.2009.00314.x
- Issue published online: 4 JAN 2010
- Article first published online: 15 APR 2009
To strengthen the theoretical foundations of incentive system design for corporate entrepreneurship, we develop a moderated model of new venture participation, integrating financial, risk, and effort factors to more comprehensively understand the limits of economic utility maximization theory. We make explicit the trade-offs and opportunity costs for corporate employee-entrepreneurs. We use a conjoint field experiment to collect data on 1952 decisions made by 61 corporate employees to test how risk and effort moderate an employee's decision to participate in a new corporate venture. We find that these factors do interact to affect the choice to engage in corporate entrepreneurship projects.