Quick-witted Entrepreneurs vs Systematic Managers: A Comparative Analysis of Decision-Making Competence

Decision-making competence (DMC) of entrepreneurs and managers is a longstanding important topic in our increasingly globalized world. Entrepreneurs and managers operate in conditions not within their own control, and good levels of DMC are often considered to be desirable for the flourishing of business and society. This paper reports an empirical investigation on the DMC of entrepreneurs and managers, in an attempt to inform about their tendencies to incur in risky and costly choices. Approach and method: We considered three cognitive biases associated with operational strategies and individual characteristics of entrepreneurs and managers, namely under/overconfidence (UOC, i.e., self-confidence in taking decisions), resistance to sunk costs (RSC, i.e., propensity to take cost investments) and consistency in risk perception (CRP, i.e., how well individuals understand probability rules). Cognitive biases measures were used in a crosssectional study on a sample of n = 639 entrepreneurs and n = 512 managers. Data collected via online survey were analyzed using descriptive statistics and inferential statistics to determine differences among entrepreneurs and managers