The impact of behavioural economics on entrepreneurial decision-making: a systematic literature review

Purpose This systematic literature review examines the intersection of behavioural economics (BE) applications in entrepreneurial decision-making (EDM), addressing critical gaps in understanding how psychological factors systematically influence entrepreneurial outcomes across diverse economic contexts. Beyond cataloguing existing research, this study aims to identify fundamental theoretical and methodological limitations that constrain current understanding and proposes an integrated framework for future research and practice. Given the absence of systematic analysis in this emerging interdisciplinary field, this review outlines a future research agenda. Design/methodology/approach A rigorous systematic review methodology, adhering to PRISMA guidelines, analysed 33 high-quality peer-reviewed papers published between 2000 and 2024 from multiple databases, using a domain-based protocol to identify research gaps. Findings The analysis reveals geographical imbalances, with developed economies dominating theoretical frameworks. Internal factors (cognitive biases, emotions, heuristics) and external factors (policy interventions, social messaging) are identified as influential in entrepreneurial decisions, especially in resource-constrained environments. Research limitations/implications This study acknowledges several limitations: the exclusion of non-academic literature restricted comprehensive analysis; the inclusion of only English-language publications limited cultural perspectives; and the review’s focus on overall BE research in EDM meant detailed examination of specific economies was beyond the scope. Originality/value This research advances BE-entrepreneurship theory through three key theoretical contributions. First, it demonstrates the theoretical necessity of integrating cognitive, emotional and contextual dimensions, rather than examining them separately, and provides empirical evidence for their systematic interdependence. Second, it introduces a context-sensitive framework explaining how behavioural principles manifest differently across economic environments, particularly addressing the theoretical gap in emerging market contexts (representing only 17.64% of existing studies). Third, the study reconciles bounded rationality with adaptive expertise through a dynamic model that captures the evolving nature of entrepreneurial cognition from novice to expert decision-making. These contributions lay the foundations for more effective, contextually relevant entrepreneurial support systems, while advancing theoretical understanding in both BE and entrepreneurship research domains.