Seminario Cognitive Uncertainty in Venture Selection: The Roles of Expertise and Complexity

The seminar is reserved for the Department of Management’s community. Other interested colleagues can contact Elisa Villani (e.villani@unibo.it).

Venture capitalists, business angels, funding agencies, and incubators evaluate ventures—a challenging task characterized by high decision uncertainty. This study examines how cognitive uncertainty affects judges’ admission recommendations in an incubator setting. Judges read venture applications, score them using preset criteria, and form an intuitive overall judgment to accept or reject the application. The analysis models this process through a Bayesian classification framework, investigating how judge expertise and venture complexity influence classification accuracy and cognitive uncertainty. The findings show that judges exhibit limited accuracy in evaluating venture quality, largely due to the highly noisy decision environment. While Bayesian models capture much of the judgment process, they struggle with less clear-cut decisions. Venture complexity increases uncertainty and reduces accuracy, whereas expertise mitigates uncertainty and improves accuracy—particularly at intermediate levels of complexity.

Thomas Åstebro is the Executive Director and Professor at the ION Management Science Lab at HEC Paris; and Scientific Director and Founder of the Creative Desctruction Lab in Paris. Leading the ION Lab he directs a group of researchers on the selection and training of talent, with a focus on AI augmentation of these human processes. He recently concluded an RCT at scale in Ecuador where over 30,000 high school students were touched with various new online training initiatives. He is now scaling up an RCT with France Travail, seeking to train the unemployed in useful skills using online and AI tools to get them to employment or to become entrepreneurs. With Carlos Serrano, CDL and the HEC Incubateur he is also exploring how to better identify and select ventures and to augment training and mentoring of founders using new AI tools. He has made over 300 presentations, published over 40 academic journal articles, and has been mentioned in business media over 50 times (including The Economist, Financial Times, Business Week, The Times, and Wall Street Journal). He earned his Ph.D. from Carnegie Mellon University in the United States.