Exploring the impact of identity fusion on managerial decision-making in eponymous firms

Yevgeny Mugerman and Rooz (Stern), Ruth

Journal of Behavioral and Experimental Finance, 2025, vol. 47, issue C

Abstract: This study examines how identity fusion influences managerial decision-making in family-owned businesses, with a particular focus on eponymous firms. Using a controlled experimental design, we exogenously manipulate identity fusion to mitigate selection biases commonly associated with archival data. Our findings demonstrate that self-identification with the firm significantly impacts managerial behavior: eponymous participants exhibit heightened optimism in gain scenarios, while in loss scenarios, we observe a tendency toward more cautious decisions, although the evidence is more limited. To validate and extend these results, we complement the experiment with a survey of executives from both eponymous and non-eponymous firms. Together, these findings highlight the critical role of psychological attachment and reputational considerations in shaping corporate decision-making within family businesses.

Keywords: Identity fusion; Experimental finance; Behavioral biases; Family-owned businesses; Eponymous firms; Managerial decision-making; Corporate forecasts (search for similar items in EconPapers)
JEL-codes: D91 G32 G41 L26 M10 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:47:y:2025:i:c:s2214635025000759

DOI: 10.1016/j.jbef.2025.101094

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