I like how you think: The role of cognitive similarity as a decision bias

Charles Y. Murnieks, J Michael Haynie, Robert E. Wiltbank, Troy Harting

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Scopus citations

Abstract

We decompose the decision-making processes of a sample of venture capitalists (VCs), investigating the degree to which 'cognitive similarity' (shared patterns of reasoning between the investor and the founder) is related to the VCs' evaluations of prospective venture deals.' Employing conjoint analysis and hierarchical linear modeling techniques, we model the VCs' assessment of a series of venture deals as a function of three attributes: the economics of the opportunity, the human capital of the founder, and the reasoning patterns of the founder. We find VCs prefer to invest in founders who demonstrate patterns of reasoning similar to their own. Further, we find that when cognitive similarity is present, the relative importance of the entrepreneur's human capital becomes even more important in the VCs' assessment of the venture deal.

Original languageEnglish (US)
Title of host publicationAcademy of Management 2007 Annual Meeting: Doing Well by Doing Good, AOM 2007
StatePublished - 2007
Event67th Annual Meeting of the Academy of Management, AOM 2007 - Philadelphia, PA, United States
Duration: Aug 3 2007Aug 8 2007

Other

Other67th Annual Meeting of the Academy of Management, AOM 2007
CountryUnited States
CityPhiladelphia, PA
Period8/3/078/8/07

    Fingerprint

Keywords

  • Cognition
  • Effectuation
  • Venture capital

ASJC Scopus subject areas

  • Management Information Systems
  • Management of Technology and Innovation

Cite this

Murnieks, C. Y., Haynie, J. M., Wiltbank, R. E., & Harting, T. (2007). I like how you think: The role of cognitive similarity as a decision bias. In Academy of Management 2007 Annual Meeting: Doing Well by Doing Good, AOM 2007