Editing Startup company (section)

===Heuristics and biases in startup actions ===
Because of the lack of information, high uncertainty, and the need to make decisions quickly, founders usually use many [[heuristic]]s and exhibit [[List of cognitive biases|biases]] in their leadership decisions.<ref name=":1">{{Cite journal|last1=Zhang|first1=Stephen X.|last2=Cueto|first2=Javier|date=9 November 2015|title=The Study of Bias in Entrepreneurship|journal=Entrepreneurship Theory and Practice|language=en|volume=41|issue=3|pages=419–454|doi=10.1111/etap.12212|s2cid=146617323|issn=1042-2587|url=http://psyarxiv.com/76rkv/|access-date=21 November 2020|archive-date=17 November 2021|archive-url=https://web.archive.org/web/20211117064745/https://psyarxiv.com/76rkv/|url-status=live}}</ref>

Entrepreneurs often become overconfident about their startups and their influence on an outcome (case of ''the illusion of control''). Below are some of the most critical decision biases of entrepreneurs to start up a new business.<ref name=":1" />

# '''[[Overconfidence effect|Overconfidence]]:''' Perceive a subjective certainty higher than the objective accuracy.The gap often leads individuals to overestimate their understanding of complex situations, resulting in decisions that are based more on subjective certainty than on objective facts or accurate information
# '''[[Illusion of control]]:''' Overemphasize how much skills, instead of chance, improve performance.
# '''The [[Hasty generalization|law of small numbers]]:''' Reach conclusions about a larger population using a limited sample.
# '''[[Availability bias]]:''' Make judgments about the probability of events based on how easy it is to think of examples.
# '''[[Escalation of commitment]]:''' Persist unduly with unsuccessful initiatives or courses of action.

Startups use several action principles to generate evidence as quickly as possible to reduce the downside effect of decision biases such as an escalation of commitment, overconfidence, and the illusion of control.