Normative Perception of Power Abuse

Leonard Hoeft, Wladislaw Mill, Alexander Vostroknutov

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Abuse of institutional power is an issue that plagues economic efficiency even in developed countries. We hypothesize that the stability of this phenomenon hinges on its normative acceptance by all parties involved. In a laboratory experiment, we create an environment conducive to unfair exploitation and study the normative perceptions of participants placed in a position of power and those who suffer from its abuse. We find that participants who abuse their power rationalize their behavior by believing that free-riding, while forcing others to cooperate, is not inappropriate. More importantly, victims of such abuse also start to believe that free-riding and punishment on the part of a powerful participant are justifiable. Recent theoretical developments suggest that such normative acceptance originates from standard updating of normative beliefs in the presence of substantial normative uncertainty created by
the ambivalent role of powerful individuals. Our results support an idea that human capacity to exculpate abusive behavior is a factor contributing to the stability of corrupt institutions.
Original languageEnglish
JournalManagement Science
Publication statusSubmitted - 2019

JEL classifications

  • c91 - Design of Experiments: Laboratory, Individual
  • c92 - Design of Experiments: Laboratory, Group Behavior
  • k42 - Illegal Behavior and the Enforcement of Law
  • h41 - Public Goods
  • d73 - "Bureaucracy; Administrative Processes in Public Organizations; Corruption"

Keywords

  • power abuse
  • social norms
  • public goods
  • punishment
  • experiments

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