Social Capital and Cognitive Bias: An Empirical Study of China

Social capital and cognition are crucial to opportunity identification in entrepreneurship. But there is a vast theoretical and empirical literature that poses the question of why some exploit opportunities and some do not. The possible reason lies in entrepreneurpsilas cognitive bias. Based on the work of Carolis and Saparito, we use 177 samples to test the relationship between social capital and cognitive bias. After empirical study, we find that trust, strong ties and shared codes and languages are positively related to overconfidence, representativeness and illusion of control respectively. Finally, we discuss the implications for future research.