Success From Satisficing and Imitation: Entrepreneurs’ Location Choice and Implications

This paper presents new data on entrepreneurs’ self-described decision processes 5 when choosing where to locate, based on scripted interviews with 49 well-placed business 6 owners and senior managers in charge of location choice. Consideration sets are surprisingly 7 small, especially among those who are successful. According to entrepreneurs’ own accounts, 8 locations are frequently discovered by chance. Few entrepreneurs describe decision processes 9 that compare marginal benefits and cost of continuing search, and several speak explicitly 10 against the usefulness of applying probabilistic beliefs to one-off events in a changing 11 environment. Nearly all interviewees describe location choice decisions based on fixed threshold 12 conditions, providing direct evidence of satisficing. Imitation is beneficial for small investment 13 projects. The data regarding entrepreneurs' decision process suggests a need to rethink 14 standard policy tools used to stimulate local economic development. 15 16