Article

Cognitive Aspects of Entrepreneurship: Decision-Making and Attitudes to Risk

Nigel Wadeson

in The Oxford Handbook of Entrepreneurship

Published in print May 2008 | ISBN: 9780199546992
Published online September 2009 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199546992.003.0004

Series: Oxford Handbooks in Business and Management C

Cognitive Aspects of Entrepreneurship: Decision-Making and Attitudes to Risk

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This article reviews literature on the study of the cognition of entrepreneurs, and how this affects their attitudes to risk. The review begins with the heuristics and biases approach. Various decision-making biases related to over-optimism are then considered. Following this perceived self-efficacy, intrinsic motivation and intentions-based models are discussed. Some theories dealing specifically with attitudes to risk are then covered. These include prospect theory, Kahneman and Lovalo's model of risk-taking, and Das and Teng's theory of risk horizons and future orientations. Finally, the option value and information cost approach to the analysis of entrepreneurs' decision-making is discussed. Some relevant references to culture research are also given in the conclusion.

Keywords: heuristics; biases approach; entrepreneurship; decision-making; intrinsic motivation; information cost

Article.  9358 words. 

Subjects: Business and Management ; Entrepreneurship ; Organizational Theory and Behaviour

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