Unraveling the Intricacies of Behavioral Biases: Exploring their Profound Influence on Working Capital Management Strategies of Entrepreneurs
Keywords:
Behavioral biases, working capital management, decision-making, entrepreneurs, overconfidence, loss aversion, confirmation bias etc.Abstract
This theoretical paper examines the profound influence of behavioral biases on the working capital management strategies employed by entrepreneurs. Drawing on insights from behavioral economics and finance, the study unravels the intricacies of various biases and their impact on entrepreneurial decision-making in relation to working capital management. Through a comprehensive analysis of relevant literature, this research sheds light on the mechanisms through which biases such as overconfidence, loss aversion, and confirmation bias shape the allocation and utilization of working capital. The findings contribute to a deeper understanding of the interplay between behavioral biases and working capital management, providing practical implications for entrepreneurs seeking to optimize their financial performance.