Do female and male entrepreneurs differ in their proneness to heuristics and biases?

Abstract

PurposeAlthough heuristics and biases seal the fate of entrepreneurial enterprises by directly influencing entrepreneurs’ decisions, previous studies have ignored the role of gender in this regard by considering female and male entrepreneurs homogeneous in their susceptibility to heuristics and biases. Thus, this paper aims to advance the existing body of knowledge on heuristics and biases in the field of entrepreneurship by exploring two heuristics of affect and representativeness as well as three biases of overconfidence, escalation of commitment and illusion of control in female and male entrepreneurs’ entry and opportunity-related decisions.Design/methodology/approachThe data were gathered through semi-structured and in-depth interviews with ten male and nine female Iranian techno-entrepreneurs active in advanced medicine and biotechnology. The gathered data were analyzed by thematic and narrative data analysis.FindingsAccording to the results, while both male and female entrepreneurs show certain heuristics and biases, there are some noteworthy distinctions. More precisely, contrary to their male counterparts, the female entrepreneurs neither rely on the representativeness heuristic nor show any signs of the escalation of commitment in their decisions.Practical implicationsThere are some valuable implications emanated from this study which could be of use for not only future researchers but also entrepreneurs, especially the ones founding and running small businesses themselves.Originality/valueWhile there is a strong body of literature on heuristics and biases in the field of entrepreneurship, previous studies have considered female and male entrepreneurs homogeneous in their proneness to heuristics and biases. Thus, the current study enriches the body of knowledge by being the first comparative study of heuristics and biases in female and male entrepreneurs’ decisions.