Anne Marie Knott
|Washington University in St. Louis -- Olin Business School|
|Date/Place/Time: Friday, October 23, 2009 at 1:30PM-3:00PM
UCLA Anderson Entrepreneurs Hall C303
Delayed exit is a substantial economic problem. Studies indicate if VCs exited ventures optimally, returns would triple, and if corporations divested underperforming business units, GDP would increase 13.6%. A prevalent explanation for delayed exit is behavioral bias associated with escalated commitment. In general however exit will be "delayed" even absent bias. This arises from decision maker efforts to avoid Type I error while discovering the long run prospects of an endeavor. Solutions differ depending upon which source of delay predominates.
|Link to paper (if available): Click here for paper|