Though pivoting is widely practiced by entrepreneurs, an optimal stopping rule in pivoting remains unexplored. Proposing an optimal foraging model and accounting for competition in exploiting an opportunity, we identify an optimal stopping rule of 30% gain-to-loss ratio. That is, additional gains are less feasible when 70% of the pivoting across future plausible versions of opportunities are traversed to. The findings have practical implications for entrepreneurs.
This is the peer reviewed version of the following article: Tsionas, M. G., & Patel, P. C. (2022). An entrepreneur's dilemma: An optimal stopping rule in pivoting. Managerial and Decision Economics, 1– 18. https://doi.org/10.1002/mde.3610 which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1002/mde.3610 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
