The Effect of Overconfidence and Optimism on Decision to Start Innovative Activities: the Mediating Role of Risk Perception (Case Study: the Companies of University Incubators)

Document Type : Research Paper

Authors

1 Assistant professor, Department of Entrepreneurship, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

2 M.A. in Entrepreneurship, Department of Entrepreneurship, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

Abstract

Cognitive biases have received special attention within the entrepreneurship literature. Yet, the majority of these studies have neglected the role of risk perceptions. This paper aims to explore the affect of overconfidence and optimism on decision to start innovative activities and to examine the mediating role of risk perception. The research is applied and done based on descriptive-correlative method. Statistical population is included of 405 entrepreneurs that are activated in university incubators. Analyses were conducted using structural equation model (SEM) on a sample of 200 entrepreneurs. Samples are selected based on stratified method and proportional allocation. Data gathered by questionnaire and validity and reliability tested by respectively, conformity factor analysis and Cronbach's alpha. The results show that overconfidence and optimism positively direct influences decision to start innovative and direct influences of overconfidence is higher than optimism. Also, the results revealed that these cognitive biases contribute to innovative activities by decreasing risk perception.
 
 

Keywords

References

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Journal of Entrepreneurship Development
Volume 8, Issue 3 - Serial Number 29
October 2015
Pages 531-550

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