What Factors Contribute to Entrepreneurs’ Decision Making Biases? A Comprehensive Study

Kambiz Talebi, Pouria Nouri and Abdolah Ahmadi Kafeshani

International Journal of Management Sciences, 2014, vol. 4, issue 2, 59-68

Abstract: Entrepreneurial decisions are of great value as well as importance in the field of entrepreneurship by playing an exceptional role in all major entrepreneurial activities. Given the unique characteristics of entrepreneurial activities, entrepreneurs are prone to decision making biases in their decisions. Because these biases directly affect enterprises, they are of crucial importance in the field of entrepreneurship. On the other hand, because these biases emanate from a lot of important factors and differ from one person to another (given their subjective nature), their identification needs an elaborate study. Having concluded that identifying the main factors influencing entrepreneurial decision making biases is vital for entrepreneurship-related studies and there is no comprehensive research study in this regard, this paper conducted a grounded theory approach by interviewing 20 Iranian entrepreneurs. According to our findings, personal (individual), environmental and organizational factors are the main categories influencing the genesis of decision making biases in entrepreneurs.

Keywords: Entrepreneurs; Decision making biases; Overconfidence; Escalation of commitment; Planning fallacy; Illusion of control; Status quo (search for similar items in EconPapers)
Date: 2014
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