IDEAS home Printed from https://ideas.repec.org/a/sae/entthe/v50y2026i3p757-788.html

The Promise of Fuzzy Set Theory for Entrepreneurial Judgment

Author

Listed:
  • Farley Simon Nobre
  • Mark D. Packard
  • Brent B. Clark

Abstract

We extend recent work on knowledge problems by observing that the complexity, ambiguity, and uncertainty of entrepreneurship pertain not only to action-outcome likelihoods but also to the very criteria of entrepreneurial judgment. Most judgment criteria—value, opportunity, options, outcomes, etc.—are “fuzzy,†rendering much of entrepreneurial judgment imperfectly suited for probabilistic analysis. Fuzzy sets and natural language accommodate partial category membership, thus offering a more approximate representation of the remarkable ability of the entrepreneurial mind to conceptualize ill-structured and abstract problems. We explain how entrepreneurs use linguistic variables to navigate and convey the complex, gradient nature of uncertainty.

Suggested Citation

  • Farley Simon Nobre & Mark D. Packard & Brent B. Clark, 2026. "The Promise of Fuzzy Set Theory for Entrepreneurial Judgment," Entrepreneurship Theory and Practice, , vol. 50(3), pages 757-788, May.
    • Handle: RePEc:sae:entthe:v:50:y:2026:i:3:p:757-788
    DOI: 10.1177/10422587251388026
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/10422587251388026
    Download Restriction: no
    File URL: https://libkey.io/10.1177/10422587251388026?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Timo Ehrig & Nicolai J. Foss, 2022. "Unknown Unknowns and the Treatment of Firm-Level Adaptation in Strategic Management Research," Strategic Management Review, now publishers, vol. 3(1), pages 1-24, February.
    2. R. E. Bellman & L. A. Zadeh, 1970. "Decision-Making in a Fuzzy Environment," Management Science, INFORMS, vol. 17(4), pages 141-164, December.
    3. Kirsten Foss & Nicolai J. Foss & Peter G. Klein & Sandra K. Klein, 2007. "The Entrepreneurial Organization of Heterogeneous Capital," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1165-1186, November.
    4. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 51(2), pages 209-223.
    5. Swan, John E. & Bowers, Michael R. & Richardson, Lynne D., 1999. "Customer Trust in the Salesperson: An Integrative Review and Meta-Analysis of the Empirical Literature," Journal of Business Research, Elsevier, vol. 44(2), pages 93-107, February.
    6. Prandelli, Emanuela & Pasquini, Martina & Verona, Gianmario, 2016. "In user's shoes: An experimental design on the role of perspective taking in discovering entrepreneurial opportunities," Journal of Business Venturing, Elsevier, vol. 31(3), pages 287-301.
    7. Dew, Nicholas & Read, Stuart & Sarasvathy, Saras D. & Wiltbank, Robert, 2009. "Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices," Journal of Business Venturing, Elsevier, vol. 24(4), pages 287-309, July.
    8. Elizabeth Maitland & André Sammartino, 2015. "Managerial cognition and internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(7), pages 733-760, September.
    9. Yi Jiang & Charles-Clemens Rüling, 2019. "Opening the Black Box of Effectuation Processes: Characteristics and Dominant Types," Post-Print hal-02380757, HAL.
    10. McMullen, Jeffery S. & Fitzsimmons, Jason R. & Shetty, Khyati & Ramoglou, Stratos, 2024. "A temporal typology of entrepreneurial opportunities: Implications for the optimal timing of entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 39(1).
    11. Packard, Mark D. & Bylund, Per L., 2021. "From homo economicus to homo agens: Toward a subjective rationality for entrepreneurship," Journal of Business Venturing, Elsevier, vol. 36(6).
    12. Arnaldo Camuffo & Alessandro Cordova & Alfonso Gambardella & Chiara Spina, 2020. "A Scientific Approach to Entrepreneurial Decision Making: Evidence from a Randomized Control Trial," Management Science, INFORMS, vol. 66(2), pages 564-586, February.
    13. David J. Rapp & Michael Olbrich, 2021. "On predictive entrepreneurial action in uncertain, ill-structured conditions," Post-Print hal-02930040, HAL.
    14. Douglas, Evan J. & Shepherd, Dean A. & Prentice, Catherine, 2020. "Using fuzzy-set qualitative comparative analysis for a finer-grained understanding of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(1).
    15. Jonathan Schad & Pratima Bansal, 2018. "Seeing the Forest and the Trees: How a Systems Perspective Informs Paradox Research," Journal of Management Studies, Wiley Blackwell, vol. 55(8), pages 1490-1506, December.
    16. Teppo Felin & Matthias Holweg, 2024. "Theory Is All You Need: AI, Human Cognition, and Causal Reasoning," Strategy Science, INFORMS, vol. 9(4), pages 346-371, December.
    17. Hunt, Richard A. & Townsend, David M. & Lerner, Daniel A. & Brownell, Katrina M., 2024. "Pivot, persist or perish? Knowledge problems and the extraordinarily tight boundary conditions of entrepreneurs as scientists," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    18. Dean A. Shepherd & Holger Patzelt, 2018. "Entrepreneurial Cognition," Springer Books, Springer, number 978-3-319-71782-1, January.
    19. F. L. Harrison, 1977. "Decision‐Making In Conditions Of Extreme Uncertainty," Journal of Management Studies, Wiley Blackwell, vol. 14(2), pages 169-178, May.
    20. Mark D. Packard & Brent B. Clark & Peter G. Klein, 2017. "Uncertainty Types and Transitions in the Entrepreneurial Process," Organization Science, INFORMS, vol. 28(5), pages 840-856, October.
    21. Berglund, Henrik & Dimov, Dimo, 2023. "Visions of futures and futures of visions: Entrepreneurs, artifacts, and worlds," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    22. Chen Ling & Pen Guozhong, 1987. "A Predictive Method of Teacher's Structure in China's University (1985--2000)," Management Science, INFORMS, vol. 33(6), pages 739-749, June.
    23. Nathan Berg & Gerd Gigerenzer, 2010. "As-if behavioral economics: neoclassical economics in disguise?," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(1), pages 133-166.
    24. Dimov, Dimo & Johnsen, Christian Garmann & Sørensen, Bent Meier, 2025. "The future within: Commitment, hope, and values in entrepreneurship," Journal of Business Venturing Insights, Elsevier, vol. 23(C).
    25. John E. Ettlie & William P. Bridges & Robert D. O'Keefe, 1984. "Organization Strategy and Structural Differences for Radical Versus Incremental Innovation," Management Science, INFORMS, vol. 30(6), pages 682-695, June.
    26. Welter, Christopher & Kim, Sungho, 2018. "Effectuation under risk and uncertainty: A simulation model," Journal of Business Venturing, Elsevier, vol. 33(1), pages 100-116.
    27. Denis Boudreaux & Spuma Rao & Phillip Fuller, 2010. "An investigation of the weekend effect during different market orientations," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 34(3), pages 257-268, July.
    28. David J. Rapp & Michael Olbrich, 2021. "On predictive entrepreneurial action in uncertain, ill-structured conditions," Review of Managerial Science, Springer, vol. 15(7), pages 1961-1979, October.
    29. Shepherd, Dean A. & Majchrzak, Ann, 2022. "Machines augmenting entrepreneurs: Opportunities (and threats) at the Nexus of artificial intelligence and entrepreneurship," Journal of Business Venturing, Elsevier, vol. 37(4).
    30. Scott C. Linn & Nicholas S. P. Tay, 2007. "Complexity and the Character of Stock Returns: Empirical Evidence and a Model of Asset Prices Based on Complex Investor Learning," Management Science, INFORMS, vol. 53(7), pages 1165-1180, July.
    31. Mark D. Packard & Per L. Bylund, 2025. "Truth, knowledge, and entrepreneurship theory: arguments for a rationalist scientific epistemology," Small Business Economics, Springer, vol. 65(1), pages 381-405, June.
    32. Adrian Hauser & Fabian Eggers & Stefan Güldenberg, 2020. "Strategic decision-making in SMEs: effectuation, causation, and the absence of strategy," Small Business Economics, Springer, vol. 54(3), pages 775-790, March.
    33. Penrose, Edith, 2009. "The Theory of the Growth of the Firm," OUP Catalogue, Oxford University Press, edition 4, number 9780199573844.
    34. Packard, Mark D. & Burnham, Thomas A., 2021. "Do we understand each other? Toward a simulated empathy theory for entrepreneurship," Journal of Business Venturing, Elsevier, vol. 36(1).
    35. Ryan W. Angus & Mark D. Packard & Brent B. Clark, 2023. "Distinguishing unpredictability from uncertainty in entrepreneurial action theory," Small Business Economics, Springer, vol. 60(3), pages 1147-1169, March.
    36. Martin Obschonka & David B. Audretsch, 2020. "Artificial intelligence and big data in entrepreneurship: a new era has begun," Small Business Economics, Springer, vol. 55(3), pages 529-539, October.
    37. Frederiks, Arjan J. & Englis, Basil G. & Ehrenhard, Michel L. & Groen, Aard J., 2019. "Entrepreneurial cognition and the quality of new venture ideas: An experimental approach to comparing future-oriented cognitive processes," Journal of Business Venturing, Elsevier, vol. 34(2), pages 327-347.
    38. Dew, Nicholas & Read, Stuart & Sarasvathy, Saras D. & Wiltbank, Robert, 2015. "Entrepreneurial expertise and the use of control," Journal of Business Venturing Insights, Elsevier, vol. 4(C), pages 30-37.
    39. Brown, Lincoln & Packard, Mark & Bylund, Per, 2018. "Judgment, fast and slow: Toward a judgment view of entrepreneurs' impulsivity," Journal of Business Venturing Insights, Elsevier, vol. 10(C), pages 1-1.
    40. Mark D Packard & Per L Bylund & Brent B Clark, 2021. "Keynes and Knight on uncertainty: peas in a pod or chalk and cheese?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(5), pages 1099-1125.
    41. Norton, William I, Jr & Moore, William T, 2002. "Entrepreneurial Risk: Have We Been Asking the Wrong Question?," Small Business Economics, Springer, vol. 18(4), pages 281-287, June.
    42. Loock, Moritz & Hinnen, Gieri, 2015. "Heuristics in organizations: A review and a research agenda," Journal of Business Research, Elsevier, vol. 68(9), pages 2027-2036.
    43. Khalid, Saddam & Sekiguchi, Tomoki, 2018. "The role of empathy in entrepreneurial opportunity recognition: An experimental study in Japan and Pakistan," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 1-9.
    44. Ramoglou, Stratos, 2021. "Knowable opportunities in an unknowable future? On the epistemological paradoxes of entrepreneurship theory," Journal of Business Venturing, Elsevier, vol. 36(2).
    45. Per L. Bylund & Mark D. Packard, 2022. "Subjective value in entrepreneurship," Small Business Economics, Springer, vol. 58(3), pages 1243-1260, March.
    46. Moren Lévesque & Martin Obschonka & Satish Nambisan, 2022. "Pursuing Impactful Entrepreneurship Research Using Artificial Intelligence," Entrepreneurship Theory and Practice, , vol. 46(4), pages 803-832, July.
    47. Busenitz, Lowell W. & Barney, Jay B., 1997. "Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making," Journal of Business Venturing, Elsevier, vol. 12(1), pages 9-30, January.
    48. Yi Jiang & Charles-Clemens Rüling, 2019. "Opening the Black Box of Effectuation Processes: Characteristics and Dominant Types," Entrepreneurship Theory and Practice, , vol. 43(1), pages 171-202, January.
    49. McKelvie, Alexander & Haynie, J. Michael & Gustavsson, Veronica, 2011. "Unpacking the uncertainty construct: Implications for entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 26(3), pages 273-292, May.
    50. Elizabeth Maitland & André Sammartino, 2015. "Decision making and uncertainty: The role of heuristics and experience in assessing a politically hazardous environment," Strategic Management Journal, Wiley Blackwell, vol. 36(10), pages 1554-1578, October.
    51. Richard H. Thaler, 2000. "From Homo Economicus to Homo Sapiens," Journal of Economic Perspectives, American Economic Association, vol. 14(1), pages 133-141, Winter.
    52. Tobias Frese & Ingmar Geiger & Florian Dost, 2020. "An empirical investigation of determinants of effectual and causal decision logics in online and high-tech start-up firms," Small Business Economics, Springer, vol. 54(3), pages 641-664, March.
    53. Herbert A. Simon & Allen Newell, 1958. "Heuristic Problem Solving: The Next Advance in Operations Research," Operations Research, INFORMS, vol. 6(1), pages 1-10, February.
    54. Davide Castelvecchi, 2016. "Can we open the black box of AI?," Nature, Nature, vol. 538(7623), pages 20-23, October.
    55. Constance E. Helfat & Margaret A. Peteraf, 2015. "Managerial cognitive capabilities and the microfoundations of dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 831-850, June.
    56. Tony Lawson, 1988. "Probability and Uncertainty in Economic Analysis," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 11(1), pages 38-65, September.
    57. Davidsson, Per, 2015. "Entrepreneurial opportunities and the entrepreneurship nexus: A re-conceptualization," Journal of Business Venturing, Elsevier, vol. 30(5), pages 674-695.
    58. Saras D. Sarasvathy & Nicholas Dew, 2013. "Without judgment: An empirically-based entrepreneurial theory of the firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 277-296, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark D. Packard & Farsan Madjdi, 2026. "Seeing Expectations as “Opportunities†: Interpretive Philosophy and the Origins of “Opportunity†Perceptions," Entrepreneurship Theory and Practice, , vol. 50(3), pages 830-861, May.
    2. Mark D. Packard & Per L. Bylund, 2025. "Truth, knowledge, and entrepreneurship theory: arguments for a rationalist scientific epistemology," Small Business Economics, Springer, vol. 65(1), pages 381-405, June.
    3. Pidduck, Robert J. & Townsend, David M. & Busenitz, Lowell W., 2024. "Non-probabilistic reasoning in navigating entrepreneurial uncertainty: A psychology of religious faith lens," Journal of Business Venturing, Elsevier, vol. 39(4).
    4. Ryan W. Angus & Mark D. Packard & Brent B. Clark, 2023. "Distinguishing unpredictability from uncertainty in entrepreneurial action theory," Small Business Economics, Springer, vol. 60(3), pages 1147-1169, March.
    5. Packard, Mark D. & Burnham, Thomas A., 2021. "Do we understand each other? Toward a simulated empathy theory for entrepreneurship," Journal of Business Venturing, Elsevier, vol. 36(1).
    6. Hunt, Richard A. & Townsend, David M. & Lerner, Daniel A. & Brownell, Katrina M., 2024. "Pivot, persist or perish? Knowledge problems and the extraordinarily tight boundary conditions of entrepreneurs as scientists," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    7. Packard, Mark D. & Bylund, Per L., 2021. "From homo economicus to homo agens: Toward a subjective rationality for entrepreneurship," Journal of Business Venturing, Elsevier, vol. 36(6).
    8. Seyb, Stella & Shepherd, Dean A. & Maitlis, Sally, 2025. "Meaningful venturing: Examining how entrepreneurs generate meaning in life," Journal of Business Venturing, Elsevier, vol. 40(5).
    9. Niloofar Salajegheh & Armin Khaleghi Forghani & Tamara Galkina & Zeynab Aeeni & Morteza Akbari, 2025. "Taking stock and looking ahead: a systematic literature review of effectuation research," Review of Managerial Science, Springer, vol. 19(8), pages 2495-2527, August.
    10. Drapeau, Marie-Josée & Tremblay, Maripier & Pepin, Matthias, 2025. "The entrepreneurial exit process: Exploring the interplay between causation and effectuation in designing stewardship exit strategies," Journal of Business Research, Elsevier, vol. 186(C).
    11. Simon Kleinert & Silvio Vismara, 2026. "The reconfiguration of entrepreneurship: how digital platforms and artificial intelligence transform the entrepreneurial process," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 16(1), pages 1-24, March.
    12. Koller, Sonia & Ahmetoglu, Gorkan & Stephan, Ute, 2025. "Measuring entrepreneurs' use of effectuation as heuristics: Development and validation of a situational judgment test (SJT) for effectuation," Journal of Business Venturing, Elsevier, vol. 40(6).
    13. Ryan W. Angus & Matthew A. Barlow, 2025. "Organizing transactions between entrepreneurs and human capital resources under Knightian uncertainty," Small Business Economics, Springer, vol. 64(3), pages 1035-1055, March.
    14. Thomas {AA}stebro & Frank M. Fossen & C'edric Gutierrez, 2026. "Attitudes Toward Ambiguity Among Self-employed and Incorporated Entrepreneurs," Papers 2603.14148, arXiv.org.
    15. Donaldson, Colin & Villagrasa, Jorge & Alegre, Joaquin & Liguori, Eric W., 2024. "Back to the future: Entrepreneurial leadership and levelling up in the mobile-gaming sector," Technology in Society, Elsevier, vol. 79(C).
    16. David J. Rapp & Michael Olbrich, 2021. "On predictive entrepreneurial action in uncertain, ill-structured conditions," Review of Managerial Science, Springer, vol. 15(7), pages 1961-1979, October.
    17. Lupp, Daniel, 2023. "Effectuation, causation, and machine learning in co-creating entrepreneurial opportunities," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    18. Gilbert-Saad, Antoine & Siedlok, Frank & McNaughton, Rod B., 2023. "Entrepreneurial heuristics: Making strategic decisions in highly uncertain environments," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    19. Per L. Bylund & Mark D. Packard, 2022. "Subjective value in entrepreneurship," Small Business Economics, Springer, vol. 58(3), pages 1243-1260, March.
    20. David J. Rapp, 2022. "Predictive vs. non-predictive entrepreneurial strategies: What’s the difference, anyway?," Review of Managerial Science, Springer, vol. 16(7), pages 2161-2179, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:entthe:v:50:y:2026:i:3:p:757-788. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.