I'll prove you wrong! The underdog effect as an antecedent to entrepreneurial action and venture persistence

Timothy L. Michaelis, April J. Spivack, Nicholas A. Smith, Jeffrey M. Pollack, Jon C. Carr, Alexander McKelvie

Journal of Business Venturing · 2026 · Volume 41 · Issue 3

DOI: 10.1016/j.jbusvent.2026.106581

Abstract

We highlight the role that psychological reactance via the underdog effect (i.e., the need to prove others wrong) plays in eliciting direct and indirect entrepreneurial action. Drawing on psychological reactance theory (PRT), we examine how negative socio-emotional stimuli can result in a strong individual motivation for entrepreneurs to persist with their ventures. Further, we highlight entrepreneurial hustle (direct action), entrepreneurship-related media engagement (indirect action), and obsessive thinking (indirect action) as mediating mechanisms linking the underdog effect to venture persistence. We test our theory-driven model across three studies. Findings from two quasi-experiments (Study 1, N = 424; Study 2, N = 579) which include 15 post-hoc interviews with entrepreneurs as part of Study 2, as well as a time-lagged mediation model (Study 3, N = 417), provide strong evidence consistent with the inference that venture persistence is closely linked to the underdog effect. We discuss multiple theoretical and practical implications that our work illustrates, and we offer numerous future research directions.

Keywords

Action, Entrepreneur, Persistence, Psychological reactance, Underdog effect

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