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Job Security and Risk‐Taking: Theory and Evidence From Professional Football
Author(s) -
Slade Peter,
Tolhurst Tor
Publication year - 2019
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/soej.12313
Subject(s) - job security , football , league , coaching , business , actuarial science , economics , work (physics) , political science , management , engineering , law , mechanical engineering , physics , astronomy
This article investigates how job security impacts risky decision making. In a theoretical model, we show how risk‐taking can be affected by job security. Agents with moderate job security become more risk averse as their job security increases. Conversely, agents with very high (or low) job security act in a more risk neutral manner. We test these predictions using data on head coaching decisions from the National Football League, finding that job security has a negative and statistically significant effect on risk‐taking.