The experiment provides evidence regarding the existence of the endowment effect and its consequences for risk-taking behavior among entrepreneurs.

Implications for underperforming entrepreneurs:

          • They tend to keep their businesses open longer than is optimal, precisely because of the endowment effect. This prevents their resources from flowing to more productive firms.

Implications for high-potential entrepreneurs:

          • The endowment effect means that these entrepreneurs increase the value of their companies, thereby reducing the likelihood of receiving external investment.

This leads to the formation of smaller companies that are financed internally or through banking services.