Heuristics and cognitive biases in entrepreneurs: a review of the research

Abstract

The aim of this research is to highlight the main characteristics of empirical studies into the heuristics and cognitive biases of entrepreneurs, and to determine what could and should now be done. To review past research, we used ProQuest and the 31 databases to which it gave us access. Only 25 empirical papers were identified, mostly published since 2006. Among other things, the findings from these papers show that overconfidence and optimism, two biases often confused, are those that have received by far the most attention from researchers. Factors explaining or explained by them were highlighted. The only other biases to have received attention, albeit limited, were the law of small numbers, the illusion of control, the planning fallacy, escalation of commitment, the status quo bias, and the hindsight bias. Research on heuristics was rare, but the findings suggest that they tend to vary according to the context (stage in the entrepreneurial process, activity sector, country, etc.). As for the methodologies, most were structured around a synchronic design. A broad range of samples and data collection techniques were used, but analysis was mainly statistical. The findings suggest that the focus in future should be on which heuristics and biases are most used or present in a given context (and why), how they are formed and configured, and how to deal effectively with them. More in-depth studies would also be useful.