Two decades of cognitive bias research in entrepreneurship: What do we know and where do we go from here?

Abstract

The study of entrepreneurial cognitive bias emerged about two decades ago and has received growing attention in entrepreneurial research. However, this is the first comprehensive review of the studies published in this field and therefore describes the current state of the art of cognitive bias research in entrepreneurship. This paper identified a total of 54 relevant articles and structures them by a typology of bias. It shows that a considerable number of articles cover overoptimism and overconfidence, while limited attention has been given to other biases such as illusion of control, the belief in the law of small numbers, escalation of commitment, planning fallacy, status quo bias, self-serving bias, and hindsight bias. Results of this review show that studies examining overoptimism and overconfidence have delivered most consistent results. The focus of the review lies on logically structuring the body of research by assessing the key issues in the determinants and in the consequences of each bias and thereby identifying a range of new research opportunities. Special emphasis was placed on incorporating insights from conceptual papers.