Investigating the influence of cognitive biases and risk perception on the formation of entrepreneurial intentions

The conceptual framework developed seeks to examine the influence of risk perception on the formation of entrepreneurial intentions through its antecedents (i.e., attitudes toward behavior, subjective social norms, perceived behavioral control. Additionally, the baseline line model is then subjected to the moderating effect of cognitive biases (i.e., cognitive deviations from rational thought). By focusing on the influence of two biases, the illusion of control and overconfidence, the study’s main theoretical assumption is that cognitive biases will strengthen the indirect relationship between risk perception and entrepreneurial intentions.<br><br>The findings reached suggest that cognitive biases and risk perception play a strong role in forming entrepreneurial intentions.

Indications show that risk perception and entrepreneurial intentions have a significant indirect relationship through attitudes and perceived behavioral control (PBC). In the collectivist culture of Saudi Arabia, no significance has been found for the effect of subjective social norms on potential entrepreneurs. The study contributes to the entrepreneurship literature by considering a multidisciplinary approach that is theoretically driven by intention models (e.g., the theory of planned behavior) and prospect theory.<br>