Prediction- and control-based strategies are the two main hypothesesof how entrepreneurs deal with uncertainty in theories of entrepreneurship. Prediction-basedstrategies focus on estimating unknowns via sampling methods, whereas control-basedstrategies focus on shaping unknowns via proactive behavior. These strategiesmay lead to different propensities to undertake uncertain prospects, as they differ in termsof cognition and involvement. In an experimental test, we study the conditions underwhich prediction- and control-based strategies lead subjects to accept bets in ambiguousenvironments. Individuals who use control methods to mitigate uncertainty are morelikely to accept the bet after a favorable outcome compared to those who use predictivemethods. These results revert in the presence of unfavorable outcomes. We discuss theimplications for entrepreneurship theory and practice.
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