Abstract: We demonstrate entrepreneurial confidence is shaped by social interactions as individuals compare themselves to peers rather than the population. In our setting, randomized connections to peers with high entrepreneurial confidence increase the likelihood young managers also become entrepreneurs, especially women with lower confidence prior to treatment. By surveying treated individuals, we confirm managers gain interest in entrepreneurship through increased confidence. We reject alternative explanations including access to entrepreneurial knowledge and decreased risk aversion. Our results also suggest shocks to confidence may increase participation in entrepreneurial training programs. Overall, we offer the first experimental evidence that peers increase entrepreneurship and relate these variables through (over)confidence.

Bio: Isaac Hacamo is an Assistant Professor of Finance at Kelley School of Business, Indiana University. His research spans the fields of household finance, corporate finance, entrepreneurship, and labor economics. In recent projects, he has studied how corporate bankruptcy affects the likelihood that workers become successful entrepreneurs; or how the rapid growth in wages in finance jobs affects the likelihood that very talented engineers join the financial sector and become less likely to be successful entrepreneurs in the long-run. In his doctoral thesis, he studied how an expansion of credit supply that follows a financial deregulation event affects the likelihood that families have more children. He received a Mechanical Engineering licenciatura degree in 2002, and a MS and PhD in Finance from University of California at Berkeley in 2014.