COGNITIVE BIASES IN DECISION-MAKING OF ENTREPRENEURS

The purpose of this paper is to provide an overview of most frequently used cognitive biases and heuristics of entrepreneurs. Entrepreneurs face exceptionally difficult decision-making conditions, like high uncertainty, time pressure and emotional tension (Shepherd & Williams, 2014). Increased use of cognitive biases and heuristics in this environment may lead to faster decision-making, but those decisions may be quite distorted. Suboptimal thinking can thus lead to losses due to the escalated commitment for unprosperous firm to the complete failure of new businesses (Camerer & Lovallo, 1999). In this paper are presented some recommendations, that may minimize cognitive biases and subsequently reduce their negative impact on life of entrepreneur.