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Exploiting one’s power with a guilty conscience: An experimental investigation of self-serving biases

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  • Otto, Philipp E.
  • Bolle, Friedel

Abstract

In our experimental investigation powerful managers use their discretion power to their own advantage and admit that their behavior is unfair. This contradicts studies stressing self-serving biases. Self-serving biases are often identified by asking people what fairness standards apply in situations with alternative income distributions. Nevertheless, when the response to a question is connected with a distributional decision, only the reply, but not necessarily the fairness standard, is biased. Social preference models envisage decisions as a compromise between self-interest and social concerns (norms). A model-based estimation of social concerns, as provided by this paper, is capable of identifying different sorts of self-serving biases. Higher income triggers higher fairness scores, but there are no indications that a relatively higher income compared to the peers is generally perceived as fairer than a relatively lower income.

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  • Otto, Philipp E. & Bolle, Friedel, 2015. "Exploiting one’s power with a guilty conscience: An experimental investigation of self-serving biases," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 79-89.
  • Handle: RePEc:eee:joepsy:v:51:y:2015:i:c:p:79-89
    DOI: 10.1016/j.joep.2015.08.005
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    2. Otto, Philipp E. & Schmidt, Lennard, 2021. "Reservation price uncertainty: Loss, virtue, or emotional heterogeneity?," Journal of Economic Psychology, Elsevier, vol. 87(C).

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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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