The psychology of entrepreneurial opportunity for entrepreneurship: evidence from North Africa

This paper aims to study the extent to which the entrepreneurial opportunity process is rational. We use a methodology that links directly between the proxy of the psychological biases of entrepreneurs and the opportunity identification and pursuit. Our sample consists of 180 Tunisian entrepreneurs and we apply an ordinary least square analysis. Our results highlight that entrepreneurs' psychology is for interest, and it influences both the opportunity identification and pursuit. In summary, the psychological biases can help entrepreneurs to identify new opportunities, but also these biases generally have a negative effect on opportunity pursuit. As policy implications, Tunisian Government is invited to give a special attention to the effect of entrepreneurs' psychology on the success of new ventures. Specifically, our findings suggest that certain psychological biases, such as overconfidence and optimism, can have a negative impact on the success of new ventures at various stages of the entrepreneurial process.