The Daughter Effect and Rational Choice : A Neuroeconomic Perspective on Executive Decision-Making

This paper investigates how fathering a daughter can endogenously shift male corporate board members' preferences toward gender-inclusive executive appointments, a phenomenon known as the "daughter effect." While previous research has empirically documented this effect, its implications for rational choice theory remain underexplored. This study develops a theoretical framework that integrates behavioral and neuroeconomic insights into classical decision theory to show that such emotionally driven shifts in preference can remain consistent with rational choice -- so long as completeness and transitivity are preserved. The analysis leverages Swedish register data on CEO appointments and proposes a neuroeconomic model in which personal experiences modify salience weights within utility functions. These evolving, context-sensitive preferences are framed not as departures from rationality but as adaptive responses within an intertemporal utility-maximizing structure. By bridging empirical data, formal economic modeling, and insights from neuroscience, this paper advances our understanding of how identity and emotion can reshape economic behavior without violating foundational theoretical axioms. Implications span corporate governance, gender equity, and the evolution of rational agency.