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Study: Early Exposure to Fatal Disasters Can Shape CEO Risk Appetite

'Deerfire high res edit' by John McColgan – Edited by Fir0002 - taken by John McColgan, employed as a fire behavior analyst at the Forest Service, an agency of the U.S. Department of Agriculture. Licensed under Public Domain via Wikimedia Commons recent study Ignobel Prize Our results  support  the hypothesis that experiencing  fatal  disasters without extremely negative consequences desensitize s  CEOs to the negative  consequences of risk.  In contrast , CEO s  who  wit nessed  the  extreme  downside potential of  disaster s  appear  to be more cautious in approach ing  risk when at the helm of a firm.  Ultimately,  the link between CEOs’ disaster experience and corporate policies has real economic  consequences on firm riskiness and  cost of capital."