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What is Your Reference Point? How Price Volatility and Organizational Context Affect the Reference Points of Family and Nonfamily Managers

Author

Listed:
  • Evelyn Stommel

    (WHU – Otto Beisheim School of Management)

  • Nicole Gottschalck

    (WHU – Otto Beisheim School of Management)

  • Andreas Hack

    (University of Bern)

  • Kimberly A. Eddleston

    (Northeastern University)

  • Franz Kellermanns

    (The University of North Carolina-Charlotte
    WHU (Otto-Beisheim School of Management))

  • Nils Kraiczy

    (University of Bern)

Abstract

Drawing from prospect theory, we use an experimental study design to explore how and why reference points of managers of family and nonfamily firms differ. We contribute to research on the role of economic theories for family businesses by elaborating on decision-making mechanisms in the context of family firms. Furthermore, we investigate whether family and nonfamily managers within family firms vary in their investment decisions. Our study demonstrates the importance of price volatility as a determinant of reference points and shows how the same type of information can lead to different reference points based on whether the manager is from a family or nonfamily firm.

Suggested Citation

  • Evelyn Stommel & Nicole Gottschalck & Andreas Hack & Kimberly A. Eddleston & Franz Kellermanns & Nils Kraiczy, 2024. "What is Your Reference Point? How Price Volatility and Organizational Context Affect the Reference Points of Family and Nonfamily Managers," Small Business Economics, Springer, vol. 63(2), pages 805-829, August.
    • Handle: RePEc:kap:sbusec:v:63:y:2024:i:2:d:10.1007_s11187-024-00880-9
    DOI: 10.1007/s11187-024-00880-9
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    More about this item

    Keywords

    Family business; Prospect theory; Reference points; Investment decisions; Family firms; Reference point; Price volatility; Family managers; Non-family managers;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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