Content area
Full Text
Research findings confirm that individuals seek confirmation for their decisions and discount data inconsistent with their beliefs. This confirmation bias-the tendency to trust, remember, and act only on information that supports what an individual already believes-is pernicious and wide-spread and may also contribute to the high failure rate of entrepreneurial ventures because of those biases. The purpose of this paper is to help entrepreneurs be aware of these biases and help them understand that bias can be moderated using System 2 thinking, which is characterized as reasoned, reflective, and conscious.
INTRODUCTION
"People are always clinging to what they want to hear, discarding the evidence that doesn't fit with their beliefs, giving greater weight to evidence that does."
- Paula Stokes, The Key to Everything
Confirmation bias appears to be pervasive throughout many aspects of life, from scientific research to political opinion and financial investing. Lazaroff (2016) finds that investors also tend to collect confirming evidence when making financial investment decisions rather than considering all existing information. The influence of confirmation bias is more significant with existing beliefs because you are more likely to acknowledge evidence that coincides with that existing belief and carefully examine evidence that questions it.
The late comic satirist, Walt Kelly, created the popular American comic strip, Pogo. Kelly often used the comic strip to engage in social and political derision through the adventures of its funny, animal characters. Kelly's strips often told us about ourselves-and the world around us and that malevolent or upsetting forces exist within us, not always outside us. Kelly's most famous quote was expressed by the porcupine, Pogo, in the poster Kelly created to promote awareness of the environment and help promote the first Earth Day observance, held on April 22, 1970: "We have met the enemy, and he is us."
Similarly, entrepreneurs face many external challenges such as competitors, securing capital/funds, or overcoming governmental agencies that refuse to issue the required business licenses, but some of the most challenging internal obstacles entrepreneurs face may be those played on them by their psyches regarding cognitive errors. Cognitive biases have a positive impact because they can help entrepreneurs make decisions without putting too much burden on their time and cognitive resources. However, cognitive biases may also lead...