Heuristics Used by Entrepreneurs in Opportunity Evaluation: A Comparison between Germany and the Middle East

What the paper says

This study examines how entrepreneurs in the Middle East and Germany apply heuristics in opportunity evaluation, distinguishing between person-related and idea-related heuristics. A factorial survey experiment with 528 German and 500 Middle Eastern entrepreneurs reveals that person-related heuristics, particularly “connections,” “leadership style,” and “experience,” strongly influence evaluations in the Middle Eastern market. In contrast, in Germany, “connections” and “leadership style” also play significant roles, with a preference for “participatory leadership” over “autocratic leadership” in both regions. The findings highlight that person-related heuristics dominate in the Middle East, whereas idea-related heuristics play a lesser role. While some heuristics appear common across contexts, closer interpretation suggests that their meaning and operation may differ according to cultural and institutional norms. Moreover, the analysis treats the Middle East as a single regional category, even though it comprises diverse national environments; findings should therefore be read as region-level generalizations. Grounded in dual-process theory, the study demonstrates how cultural contexts shape the intuitive foundations (System 1 processing) from which heuristics emerge, with person-related heuristics proving more cognitively accessible than idea-related characteristics requiring effortful analytical evaluation. This study contributes to the literature by providing empirical evidence on heuristic application in opportunity evaluation. Entrepreneurs can leverage these insights to refine decision-making, while policymakers may use them to foster supportive environments and mitigate biases in entrepreneurial processes.