Abstract
This research examined the relationship between narcissistic traits and cognitive biases in entrepreneurs, emphasizing the mediating influence of AI literacy and the moderating impact of AI-assisted mindfulness. Data were collected from 260 registered women entrepreneurs operating in the SME sector across Punjab, Pakistan, using a proportionate stratified sampling method, and were analyzed through Smart-PLS. The results indicate the significant bonding between narcissistic personality traits and AI literacy as well as the AI literacy acts as a robust mediator between narcissism and cognitive biases. Furthermore, AI-assisted mindfulness serves as a strong moderator, significantly diminishing cognitive biases and improving rational AI decision-making. The findings highlight the necessity for focused AI literacy initiatives, particularly for women entrepreneurs susceptible to behavioral biases. This study, rooted on behavioral finance and prospect theory, introduces an innovative conceptual framework that combines personality traits, cognitive distortions, and emotional regulation. The ramifications are extensive, providing significant insights for legislators, AI institutions, and program creators in advancing gender-sensitive AI literacy and mindfulness-based support initiatives.