Marius Guenzel

Marius Guenzel
  • Assistant Professor of Finance

Contact Information

  • office Address:

    2455 Steinberg-Dietrich Hall
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: corporate finance, behavioral finance, organizational economics, labor economics, behavioral economics

Links: CV, Personal Website


  • Marius Guenzel, Ulrike Malmendier, Denis Sosyura, Longevity and Occupational Choice.

  • Paul Decaire and Marius Guenzel, What Drives Very Long-Run Cash Flow Expectations?.

  • Marius Guenzel and Tong Liu, Excess Commitment in R&D (The Review of Financial Studies, R&R).

  • Marius Guenzel, Clint Hamilton, Ulrike Malmendier, Prosociality and Layoffs.

  • Marius Guenzel, In Too Deep: The Effect of Sunk Costs on Corporate Investment (The Journal of Finance, forthcoming).

    Abstract: Sunk costs are unrecoverable costs that should not affect decision-making. I provide evidence that firms systematically fail to ignore sunk costs and that this leads to significant investment distortions. In fixed-exchange-ratio stock mergers, aggregate market fluctuations after parties enter into a binding merger agreement induce plausibly exogenous variation in the final acquisition cost. These quasi-random cost shocks strongly predict firms’ commitment to an acquired business following deal completion, with an interquartile cost increase reducing subsequent divestiture rates by 8-9%. Consistent with an intrapersonal sunk cost channel, distortions are concentrated in firm-years in which the acquiring CEO is still in office.

  • Mark Borgschulte, Marius Guenzel, Canyao Liu, Ulrike Malmendier, CEO Stress, Aging, and Death (The Journal of Finance, forthcoming).

    Abstract: We assess the long-term effects of managerial stress on aging and mortality. First, we show that exposure to distress shocks during the Great Recession produces visible signs of aging in CEOs. Applying neural-network based machine-learning techniques to pre- and post-distress pictures, we estimate an increase in their so-called apparent age by one year. Second, using data on CEOs since the 1980s, we estimate a 1.2-year decrease in life expectancy after an industry distress shock, but a two-year increase when anti-takeover laws insulate CEOs from market discipline. The estimated health costs are significant, also relative to other known health risks.

  • Marius Guenzel and Ulrike Malmendier (2020), Behavioral Corporate Finance: The Life Cycle of a CEO Career, Oxford Research Encyclopedia of Economics and Finance, September 2020.

    Abstract: One of the fastest-growing areas of finance research is the study of managerial biases and their implications for firm outcomes. Since the mid-2000s, this strand of behavioral corporate finance has provided theoretical and empirical evidence on the influence of biases in the corporate realm, such as overconfidence, experience effects, and the sunk-cost fallacy. The field has been a leading force in dismantling the argument that traditional economic mechanisms — selection, learning, and market discipline — would suffice to uphold the rational-manager paradigm. Instead, the evidence reveals that behavioral forces exert a significant influence at every stage of a chief executive officer’s (CEO’s) career. First, at the appointment stage, selection does not impede the promotion of behavioral managers. Instead, competitive environments oftentimes promote their advancement, even under value-maximizing selection mechanisms. Second, while at the helm of the company, learning opportunities are limited, since many managerial decisions occur at low frequency, and their causal effects are clouded by self-attribution bias and difficult to disentangle from those of concurrent events. Third, at the dismissal stage, market discipline does not ensure the firing of biased decision-makers as board members themselves are subject to biases in their evaluation of CEOs. By documenting how biases affect even the most educated and influential decision-makers, such as CEOs, the field has generated important insights into the hard-wiring of biases. Biases do not simply stem from a lack of education, nor are they restricted to low-ability agents. Instead, biases are significant elements of human decision-making at the highest levels of organizations. An important question for future research is how to limit, in each CEO career phase, the adverse effects of managerial biases. Potential approaches include refining selection mechanisms, designing and implementing corporate repairs, and reshaping corporate governance to account not only for incentive misalignments but also for biased decision-making.


Current Courses (Spring 2024)

  • FNCE2390 - Behavioral Finance

    This course combines insights from behavioral economics and psychology to shed light on anomalous decisions by investors and possibly behavior of asset prices. Its content is designed to both complement and challenge the "rational" investment paradigms developed in the early finance classes. It introduces students to much modern theoretical and empirical research showing this paradigm to be insufficient to describe various features of actual financial markets. The course structure involves early lectures, several cases, and a final project involving "real life" examples and some modern research methods. In the capstone project students research and explore a specific behavioral bias or a profitable investment opportunity. Students will work in groups to simulate the behavior of, say: a portfolio management team looking for a new trading strategy; a consulting firm advising corporations on issues of financial management; or an entrepreneurial start-up developing a retail financial product. The main deliverable is in a form of a "pitch" to potential clients to be delivered both in the form of a group presentation in class and a formal write-up to be submitted by the due date.

    FNCE2390001 ( Syllabus )

  • FNCE7390 - Behavioral Finance

    There is an abundance of evidence suggesting that the standard economic paradigm - rational agents in an efficient market - does not adequately describe behavior in financial markets. In this course, we will survey the evidence and use psychology to guide alternative theories of financial markets. Along the way, we will address the standard argument that smart, profit-seeing agents can correct any distortions caused by irrational investors. Further, we will examine more closely the preferences and trading decisions of individual investors. We will argue that their systematic biases can aggregate into observed market inefficiencies, thus giving rise to apparently profitable trading strategies. The latter part of the course extends the analysis to corporate decision making. We then explore the evidence for both views in the context of capital structure, investment, dividend, and merger decisions. In addition to prerequisites, FNCE 7050 is highly recommended but not required.

    FNCE7390001 ( Syllabus )

In the News

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Latest Research

Marius Guenzel, Ulrike Malmendier, Denis Sosyura, Longevity and Occupational Choice.
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In the News

How Sunk Costs Affect Firms’ Investment Decisions

Research by Wharton’s Marius Guenzel provides evidence that companies systematically fail to ignore “sunk costs” in losing ventures, which leads to significant investment distortions.Read More

Knowledge at Wharton - 1/23/2023
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Get to Know the 20 New Faculty Members Joining Wharton This Year

This upcoming academic year, the Wharton School will welcome 20 new faculty members. These brilliant minds are leading experts in a wide range of fields, including business, social science, finance, economics, public policy, management, marketing, statistics, real estate, and operations. One of the most exciting additions to the Wharton community…

Wharton Stories - 08/17/2020
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