Major Decision Making biases Leading to Entrepreneurs’ False Predictions

Entrepreneurial decision making biases have various effects on entrepreneurial decisions and on the fate of entrepreneurial enterprises, subsequently. These biases emanate from a lot of factors and have been a prosperous topic for entrepreneurship- related scholars and both their causes as well as their effects have been scrutinized in the past. Given the nature of entrepreneurship and the unique characteristics of entrepreneurs, some scholars have hypothesized that entrepreneurs are prone to these biases more than others. One of the main functions of entrepreneurs that could be influenced by these biases is entrepreneurial predictions. These predictions are so important that could seal the fate of an enterprise. Despite the apparent relationship between entrepreneurial decision making biases and forecasts made by entrepreneurs, there are very few studies regarding this topic. In order to fill this gap, this paper conducted a qualitative content analysis approach to study the relationship between entrepreneurial forecasts (predictions) and entrepreneurial decision making biases. According to our findings based on interviews with 20 entrepreneurs, overconfidence, planning fallacy and illusion of control are three major biases leading to entrepreneurs’ making false predictions.