Because individuals can have cognitive biases that lower their perceptions of decision risk, some suggest that teams, not individuals, should make decisions. Prior research, however, has not explored whether a team’s risk perception is affected by information-processing biases that are similar to the cognitive biases that individuals exhibit. This study examines whether three biases—the law of small numbers bias, illusion of control, and overconfidence—influence perception of risk of a first move at the team and individual levels. It was found that the law of small numbers and illusion of control decreased the risk perception at both levels and that the law of small numbers had a significantly greater effect on team risk perception than on individual risk perception. In contrast, the effect of overconfidence was not significant at any level. Implications of the findings are discussed and future research directions are offered.
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