Procedural fairness and profit seeking: The perceived legitimacy of market exploitation

Abstract

Abstract Recent studies by Kahneman et al. (1986a, b) present consistent evidence that the economically rational decision of market exploitation is perceived as unfair by individuals. Further, these fairness judgments are influenced by the sign of the outcome—that is, an outcome coded as a gain is perceived as fairer than an objectively similar outcome coded as a loss, particularly when they occur for the benefit of the exploiter. As an extension of the Kahneman et al. research, we examine the influence of both outcome sign and information about the procedures used to allocate the outcome on individual judgements of market exploitation. Replicating Kahneman et al., we found that market exploitation is judged as unfair, and that such judgements are influences by the subjective coding (as gains or losses) of objectively similar outcomes. In addition, we found that procedural information also influences judgements of market exploitation. The implications of these results are discussed.

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