The impact of communication, gender, and risk aversion on family businesses’ sustainable practices: A game theoretical and experimental approach

Abstract

We explore how communication, gender, and risk aversion influence decision-making in sustainability within family businesses. Using game theory, we model a sustainability decision-making-focused game, wherein we frame adopting sustainable practices considering the alignment between founder engagement and the successor’s proactive approach. We then use experimental economics to assess the robustness of the theoretical outcomes in real-world scenarios through simulated strategic interactions. Our main methodological contribution is bridging the gap between theory and empirical data under family business sustainability practices by combining game theory and experimental economics. Our findings show that communication increases the likelihood of sustainability decision-making, while gender and risk aversion have no statistically significant effect. However, when communication is factored in, gender becomes a significant factor, with females showing a greater likelihood of investing in sustainability.