PROCEDURAL FAIRNESS AND PROFIT SEEKING - THE PERCEIVED LEGITIMACY OF MARKET EXPLOITATION

Recent studies by Kahneman et al. (1986a, b) present consistent eviden ce that the economically rational decision of market exploitation is p erceived as unfair by individuals. Further, these fairness judgments a re influenced by the sign of the outcome - that is, an outcome coded a s a gain is perceived as fairer than an objectively similar outcome co ded as a loss, particularly when they occur for the benefit of the exp loiter. As an extension of the Kahneman et al. research, we examine th e influence of both outcome sign and information about the procedures used to allocate the outcome on individual judgements of market exploi tation. Replicating Kahneman et al., we found that market exploitation is judged as unfair, and that such judgements are influences by the s ubjective coding (as gains or losses) of objectively similar outcomes. In addition, we found that procedural information also influences jud gements of market exploitation. The implications of these results are discussed.