Procedural Preferences in Competitive Environments: A Field Experiment in Madagascar

 Marcela Ibanez,  Gerhard Riener, and Viviana Uruena

This paper considers preferences for procedural fairness in competitive environments. We test whether individuals exploit their power to unfairly leverage advantage over their competitors and compare the willingness to do so under two forms of power advantage procedures: spying or sabotaging. The results of a field experiment in Madagascar indicate that about 40 percent of participants engage in unfair competition. Yet, they do not always use this to their advantage and instead favor their opponents. We find no significant differences between the two procedures, indicating that the moral cost of exploitation is similar. Exposure to higher criminal environments increases the likelihood of deceptive behavior. When advantageous interactions are allowed in a known network, altruism decreases but trust and trustworthiness do not change. This finding suggests that individuals internalize pre-existing norms and that crime has persistent and long-term effects.