VIOLENCE AND COMPETITION: THE EFFECT OF MASS SHOOTINGS AND DOMESTIC TERRORISM ON ORGANIZATIONAL RISK-TAKING IN RESPONSE TO PERFORMANCE SHORTFALLS

This study examines how violent traumatic events in local communities—such as mass shootings and domestic terrorism—affect organizational risk-taking in response to performance shortfalls. Integrating insights from the behavioral theory of the firm and regulatory focus theory, we hypothesize that, by evoking negative emotions, exposure to violent traumatic events lowers decision-makers’ promotion focus and, in turn, reduces their propensity to undertake risky actions aimed at closing the performance–aspiration gap. We further hypothesize that this effect is amplified when decision-makers have longer tenure in the community or are geographically proximate to the site of violence. We test our framework using two complementary empirical approaches: an observational field study in the NFL and two controlled experiments. The field study analyzes 39,343 fourth-down decisions made by NFL teams between 2009 and 2018, linked to data on violent events in the surrounding communities. The experimental studies replicate the primary findings and validate the proposed regulatory focus-based mechanism. Our study extends the behavioral theory of the firm by shifting the lens from dispassionate agents reacting to impersonal forces to decision-makers whose behavior is shaped by personally meaningful community-specific shocks and their emotional consequences.