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Exploring decision-making biases among Iranian entrepreneurs: some novel insights

Pouria Nouri (Faculty of Entrepreneurship, University of Tehran, Tehran, Iran)

Journal of Entrepreneurship in Emerging Economies

ISSN: 2053-4604

Article publication date: 24 December 2021

Issue publication date: 27 April 2023

274

Abstract

Purpose

Decision-making biases play decisive roles not only in entrepreneurs’ decisions but also in the fate of entrepreneurial businesses. While the extant literature in this regard is relatively rich, it has predominantly focused on certain biases like overconfidence and overoptimism at the expense of other possibly influential biases, which could influence entrepreneurial decisions. Thus, to address this serious research gap, this paper aims to explore four of the less-researched biases of escalation of commitment, the illusion of control, confirmation and the belief in the law of small numbers in entrepreneurial decisions.

Design/methodology/approach

By taking a qualitative approach, the data for this study were collected through face-to-face interviews with 19 Iranian habitual (experienced) entrepreneurs running small businesses and analyzed by a qualitative thematic analysis.

Findings

According to the results, the environmental uncertainty, the reluctance to lose face and the experiences of previous failures contributed to the escalation of commitment, while disregard for external factors beyond one’s control caused the illusion of control, factors like prior successful businesses in the same sector, looking for resorts to manage uncertainty, along with the decision to exploit opportunities resulted in the confirmation bias, while the expenses of conducting sweeping pilot tests in the market and the reluctance to reveal a business secret to the competitors were the main contributors of the belief in the law of small numbers.

Originality/value

This study is a pioneer in scrutinizing four less-researched but important biases in entrepreneurs and, thus extending the line of research in this regard.

Keywords

Citation

Nouri, P. (2023), "Exploring decision-making biases among Iranian entrepreneurs: some novel insights", Journal of Entrepreneurship in Emerging Economies, Vol. 15 No. 3, pp. 497-515. https://doi.org/10.1108/JEEE-08-2021-0330

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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