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Article: Opportunity evaluation under risky conditions: the cognitive processes of entrepreneurs.
- Article from:
- Entrepreneurship: Theory and Practice
- Article date:
- December 22, 2002
- Author:
CopyrightCOPYRIGHT 2002 Baylor University. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Even though the entrepreneurship literature places much emphasis on opportunity recognition, little is known about how entrepreneurs actually evaluate opportunities. This study uses a cognitive approach to examine opportunity evaluation, as the perception of opportunity is essentially a cognitive phenomenon. We present s model that consists of four independent variables (overconfidence, belief in the law of small numbers, planning fallacy, and illusion of control), a mediating variable (risk perception), two control variables (demographics and risk prosperity), and the dependent variable (opportunity evaluation). We find that illusion of control and belief in the law of ...