Entrepreneurs tend to operate under conditions of high time pressures, complexity and uncertainty – the type of conditions where fast and straight-forward heuristic thinking is particularly useful (Forbes, 2005; Kahneman and Tversky, 1974; Keh et al., 2002, Tversky and Kahneman, 1974; Simon et al., 2000). Heuristics drive human intuition, while biases are the inevitable errors of heuristic thinking (Kahneman, 2003).

The majority of existing research up till now has focused on the different problems arising due to biased decision making (e.g. Camerer and Lovallo, 1999; Keh et al., 2002; Simon et al., 2000; Zacharakis and Shepherd, 2001). A different perspective postulates that both heuristics and biases could be advantageous for entrepreneurs. If different individuals and organizations are cognitively biased in different ways, they are likely to make decisions in fundamentally different ways. Such differences in the field of strategic management have been shown to be the sources of either competitive advantage or disadvantage of the firms (Busenitz and Barney, 1997).