The basic income and prospect theory:implications for the field of entrepreneurship.

Qian, Shanshan and Miao, Chao and Humphrey, Ronald (2021) The basic income and prospect theory:implications for the field of entrepreneurship. Industrial and Organizational Psychology, 14 (4). pp. 605-608. ISSN 1754-9426

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Abstract

In their focal article, Hüffmeier and Zacher (2021) discussed the promise for the field of industrial, work, and organizational psychology to examine the topic of the basic income. One typically asked question as discussed in their article is whether the basic income will encourage more people to become entrepreneurs. Hüffmeier and Zacher indicated that the basic income may provide individuals with a choice to leave the labor market to take entrepreneurial risks; it also provides those having limited economic resources with a financial buffer to encourage entrepreneurship activities. The rise of the psychology of entrepreneurship has strengthened and enriched the field of ndividual and organizational (I-O) psychology (Frese & Gielnik, 2014). Likewise, investigating the effect of the basic income on entrepreneurship has high topical relevance to the field of industrial, work, and organizational psychology. In this commentary, we expanded on the discussion by Hüffmeier and Zacher regarding the effect of the basic income on entrepreneurship. Specifically, we built on prospect theory to present a two-by-two matrix to unravel the complexities underlying the effect of the basic income on entrepreneurship. We also discussed future directions and provided some recommendations for researchers and practitioners to develop some joint efforts in order to address the topic of the basic income.