Prediction Based on Entrepreneurship-Prone Personality Profiles: Sometimes Worse Than the Toss of a Coin

Abstract

The human personality predicts a wide range of activities and occupational choices-from musical sophistication to entrepreneurial careers. However, which method should be applied if information on personality traits is used for prediction and advice? In psychological research, group profiles are widely employed. In this contribution, we examine the performance of profiles using the example of career prediction and advice, involving a comparison of average trait scores of successful entrepreneurs with the traits of potential entrepreneurs. Based on a simple theoretical model estimated with GSOEP data and analyzed with Monte Carlo methods, we show, for the first time, that the choice of the comparison method matters substantially. We reveal that under certain conditions the performance of average profiles is inferior to the tossing of a coin. Alternative methods, such as directly estimating success probabilities, deliver better performance and are more robust.

Open for business: The impact of creative team environment and innovative behaviour in technology-based start-ups

“…Personality predicts a wide range of individual behaviours, including the decision to become an entrepreneur (Konon and Kritickos, 2019) as well as a determinant entrepreneurial performance such as income (Levine and Rubinstein, 2017). Openness to experience, as one of the dimensions of the big five personality constructs, refers to those who are intellectually curious, imaginative and creative; this dimension is regarded as an important trait of entrepreneurs (Antoncic et al, 2015).…”

Understanding entrepreneurial intentions around the world: an empirical approach

“…Thus, career outcomes are influenced by personality and it seems that individuals with a certain personality are better able to become successful entrepreneurs than others (Konon and Kritikos, 2018). On the other hand, Lent et al (2000) suggest that the individual's immediate personal environment (e.g., significant others like co-workers, friends and/or family) as well as the broader sociocultural context (e.g., societal culture) influence career choices.…”