Tori Yu-Wen Huang

Research Summary: We examine the influence of two conflicting emotions—group fear and group hope—in entrepreneurial team decision‐making. We are interested in which emotion will be more strongly related to whether entrepreneurial teams escalate their commitment to a currently failing venture versus terminating that venture. Using a longitudinal start‐up simulation and based on data from 66 teams across 569 decision‐making rounds, we find that group “hope trumps fear.” That is, the relationship between group hope and escalating commitment to a failing venture is stronger than the relationship between group fear and terminating that venture. We predict and find that team engagement mediates these relationships. We find partial support for a predicted moderation effect of group friendship strength. Theoretical implications are discussed. Managerial Summary: Emotions are a critical but often unacknowledged part of entrepreneurial decision‐making. We tested whether group fear or group hope will most strongly influence teams' decisions to escalate their commitment, versus terminating a currently failing venture. Using a longitudinal entrepreneurial simulation, based on data from 66 teams across 569 decision‐making rounds, we find that “hope trumps fear.” That is, the relationship between group hope and escalating commitment to a failing venture is stronger than the relationship between group fear and terminating that venture. Group engagement versus disengagement helps to explain this finding. Our results indicate the importance of entrepreneurs understanding and managing their team emotions for the best decision‐making. It also helps explain the continued engagement of entrepreneurial teams who even, when fearful, have hope.

The interaction between the two cognitive modes—the automatic, intuitive mode, and the conscious, analytic mode—has been a long-standing debate in the psychological fields. In a seminal paper, Louis and Sutton (1991) suggested that cognitive switches from the default automatic mode (“intuition”) to the conscious mode (“analysis”) could improve decisions. We develop a complementary theoretical perspective titled intuitive interruptions in the context of complex managerial decisions when analysis is the default mode. Combining hints in extant literature with decision thought experiments, we propose that a way for managerial decision makers to enjoy the complementarities between analysis and intuition is to allow intuitions to interrupt the default analytic processes of complex decision making—that is, to switch from the conscious, analytic mode to the automatic, intuitive mode, and then to switch back. Such intuitive interruptions focus and redirect subsequent analysis and consequently improve decision quality in situations of information overload and information insufficiency. Theoretical and practical implications are discussed.