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

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.