Psychological Perspectives on Entrepreneurship: Cognitive and Social Factors in Entrepreneurs' Success

Why are some entrepreneurs so much more successful than others in starting new companies—ones that create wealth for their societies as well as themselves? Growing evidence suggests that the answer involves the influence of both cognitive and social factors. Successful entrepreneurs appear to think differently than other persons in several respects (e.g., they are less likely to engage in counterfactual thinking but more likely to show overconfidence in their judgments). Similarly, successful entrepreneurs appear to be higher in social competence —the ability to interact effectively with others (e.g., they are better at social perception and adapting to new social situations). These results suggest that the principles and findings of psychology can be invaluable to researchers in the field of entrepreneurship, providing important insights into the factors that influence entrepreneurs' success.