AI and Prior Sector Knowledge: Effects on Opportunity Recognition, Assessment, and Exploitation

Integrating artificial intelligence (AI) into entrepreneurial decision-making transforms how opportunities are recognized, assessed, and exploited. This study examines the nuanced interplay between AI-driven insights and human cognition in shaping entrepreneurial outcomes, specifically the balance between intuitive and deliberative thinking. Through a series of controlled laboratory experiments involving entrepreneurs, we investigate how varying levels of AI usage and prior sector knowledge influence the quality and depth of entrepreneurial decisions. The findings reveal that AI significantly enhances the depth and precision of opportunity assessments and exploitation strategies but constrains creativity and novelty in opportunity recognition. Entrepreneurs with prior sector knowledge achieve a critical balance, leveraging AI-driven deliberation alongside intuitive insights to outperform those relying solely on AI or intuition. These results contribute to dual-process theories of cognition and entrepreneurial decision-making by demonstrating how AI reshapes the cognitive processes underpinning entrepreneurial action. Practically, this study highlights the importance of integrating AI tools strategically to complement, rather than replace, human intuition, fostering both innovation and strategic rigor in entrepreneurial practice.