Abstract
This study explores entrepreneurs' decision-making processes regarding start-ups using the behavioral science decision model. The findings tentatively suggest that almost all the results of the American survey were the same as the Japanese one. We examined the kinds of elements that lowered risk perception. Using previous American studies, several control variables were tested. Based on these surveys, we decided to check three typical cognitive biases; over-confidence, illusion of control and belief in the law of small numbers. The results showed that over- confidence is not significantly related to risk perception, as in the US. The significance of the latter two cognitive biases, however, unlike in the US studies, was denied. Therefore, Japanese entrepreneur decision-making is influenced by other complex factors, which should be further explored. Potential entrepreneurs' traits, such as risk propensity, optimism and flexibility have already been excluded in US surveys, but this test shows a significant relation between risk propensity and the decision to start a venture. Ordinary Japanese people think that ventures are only for extraordinary people. That belief still holds. We conclude that more entrepreneurial education and PR measures are necessary to raise the number of start-ups.
