BEHAVIORAL BIASES, RISK PERCEPTION AND ENTREPRENEURIAL DECISION-MAKING: EVIDENCE FROM SMALL BUSINESS DEVELOPMENT IN UZBEKISTAN

Entrepreneurial decision-making is traditionally explained through expected profitability, access to capital, market competition, and the evaluation of investment risks. However, behavioral economics suggests that entrepreneurs' decisions are also influenced by psychological factors, including loss aversion, overconfidence, status quo bias, ambiguity aversion, and reference-dependent preferences. This article investigates the theoretical relevance of these factors to entrepreneurship and analyzes structural changes in small business development in Uzbekistan. Using official statistics from the National Statistics Committee, the study applies comparative analysis, percentage-point calculations, growth-rate analysis, regional comparisons, and scenario modeling. The results show that the share of small business and private entrepreneurship in gross value added declined from 56.7% in 2020 to 52.2% in 2025, a reduction of 4.5 percentage points. Furthermore, the number of operating small businesses declined from 523,556 in the 2023 reference year to 358,116 in 2025, followed by an increase to 403,767 in 2026. These changes require careful interpretation because business statistics may be influenced by administrative and structural factors. The study develops a conceptual behavioral model of entrepreneurial decisions and proposes institutional interventions involving risk communication, business mentoring, decision-support systems, and entrepreneurial education. The findings suggest that combining behavioral insights with traditional entrepreneurship policies may improve decision quality, although causal behavioral effects remain to be empirically established.