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Marriage and Managers' Attitudes to Risk


  • Nikolai Roussanov

    () (The Wharton School, University of Pennsylvania Philadelphia, Pennsylvania 19104; and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Pavel Savor

    () (Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122)


Marital status can both reflect and affect individual preferences. We explore the impact of marriage on corporate chief executive officers (CEOs) and find that firms run by single CEOs exhibit higher stock return volatility, pursue more aggressive investment policies, and do not respond to changes in idiosyncratic risk. These effects are weaker for older CEOs. Our findings continue to hold when we use variation in divorce laws across states to instrument for CEO marital status, which supports the hypothesis that marriage itself drives choices rather than it just reflecting innate heterogeneity in preferences. We explore various potential explanations for why single CEOs may be less risk averse.Data, as supplemental material, are available at . This paper was accepted by Wei Jiang, finance .

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  • Nikolai Roussanov & Pavel Savor, 2014. "Marriage and Managers' Attitudes to Risk," Management Science, INFORMS, vol. 60(10), pages 2496-2508, October.
  • Handle: RePEc:inm:ormnsc:v:60:y:2014:i:10:p:2496-2508

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    References listed on IDEAS

    1. Nikolai Roussanov, 2010. "Diversification and Its Discontents: Idiosyncratic and Entrepreneurial Risk in the Quest for Social Status," Journal of Finance, American Finance Association, vol. 65(5), pages 1755-1788, October.
    2. Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
    3. Nicholas Bloom & John Van Reenen, 2010. "Why Do Management Practices Differ across Firms and Countries?," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 203-224, Winter.
    4. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-846, July-Aug..
    5. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
    6. Maurice Levi & Kai Li & Feng Zhang, 2010. "Deal or No Deal: Hormones and the Mergers and Acquisitions Game," Management Science, INFORMS, vol. 56(9), pages 1462-1483, September.
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    Cited by:

    1. Manuel Ammann & Philipp Horsch & David Oesch, 2016. "Competing with Superstars," Management Science, INFORMS, vol. 62(10), pages 2842-2858, October.
    2. Lu, Yan & Ray, Sugata & Teo, Melvyn, 2016. "Limited attention, marital events and hedge funds," Journal of Financial Economics, Elsevier, vol. 122(3), pages 607-624.
    3. Stark, Oded & Zawojska, Ewa, 2015. "Gender differentiation in risk-taking behavior: On the relative risk aversion of single men and single women," Economics Letters, Elsevier, vol. 137(C), pages 83-87.
    4. Alexander Cochard & Stephan Heller & Vitaly Orlov, 2018. "In Military We Trust: The Effect of Managers' Military Background on Mutual Fund Flows," Working Papers on Finance 1826, University of St. Gallen, School of Finance.
    5. repec:eee:corfin:v:46:y:2017:i:c:p:461-476 is not listed on IDEAS

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    marriage; risk; CEO; investment; volatility; divorce;


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