Abstract
This research explores the mechanisms through which social identity and group norms lead to economically irrational decisions in small entrepreneurial firms. While the concept of “bounded rationality” articulated the adverse effects of constrained information and cognitive capabilities on decision-making, the specific impact of social identity and group norms on irrational decisions in small entrepreneurial firms remains underexplored. Using semi-structure interviews and multiple-case studies, this study examines how social identity and group norms influence irrational entrepreneurial decisions. Initial interviews will identify key themes, informing detailed case studies. Hence, the research aims to gain insights for developing strategies to support more rational decision-making in small firms.