Publication Type
Journal Article
Version
publishedVersion
Publication Date
9-2018
Abstract
Lude and Prügl explored “family business bias,” a cognitive tendency where the family nature of a firm can often reduce investors’ perceived risk in investments. As a result, investors would display lower risk-avoidance in the gain domain and reinforced risk-seeking in the loss domain. We expanded the authors’ work by introducing four cognitive factors (anchoring, representativeness, stereotype heuristic, and information availability) that can explain the underlying mechanisms behind the prevalence of “family business bias” and other cognitive misperceptions surrounding family businesses when it comes to investment decisions.
Keywords
family business, cognitive bias
Discipline
Databases and Information Systems | Management Information Systems
Research Areas
Information Systems and Management
Areas of Excellence
Digital transformation
Publication
Entrepreneurship Theory and Practice
Volume
43
Issue
2
First Page
409
Last Page
416
ISSN
1042-2587
Identifier
10.1177/1042258718796073
Publisher
SAGE Publications
Citation
FANG, H.; SIAU, Keng; MEMILI, E.; and DOU, J..
Cognitive antecedents of family business bias in investment decisions: A commentary on 'Risky decisions and the family firm bias: An experimental study based on prospect theory. (2018). Entrepreneurship Theory and Practice. 43, (2), 409-416.
Available at: https://ink.library.smu.edu.sg/sis_research/9367
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1177/1042258718796073