A systematic review of managers’ cognitive biases in excess market entry

The high rate of business failure in the market entry or excess entry as one of the anomalies in the field of strategic management has attracted the attention of researchers in recent years. Previous research in this field has emphasized the role of managers' cognitive bias in excess entry. Based on this, the current research seeks to identify and categorize the cognitive bias involved in excess market entry by a systematic review of the literature in this field. This research in terms of purpose is developmental-applied research and in terms of method is descriptive. Also, this research based on the nature of data is qualitative. The data of this research have been collected through the libraries study and analyzed through a systematic review method. For this purpose, 22 articles in the period 1999 to 2020 have been selected by reviewing keywords, abstracts, and finally the text of articles. By reviewing articles, managers’ six cognitive biases identified. These cognitive biases occur in three basic factors of market entry. First, managers' cognitive biases about firm capabilities include: overconfidence (overestimation and overprecision), planning fallacy, and illusion of control. Second, managers' cognitive biases about competition include: overconfidence (overplacement), and competitors neglect (competitive blind spots and brick wall effect). Third, managers' cognitive biases about market demand include: optimism, and anchoring. Finally, a general framework of managers' cognitive biases in market entry decisions are presented. As well as, mitigating strategies for cognitive market entry bias have been presented. Also, theoretical and practical implications are presented.