Deepak Malhotra and Francesca Gino, both of Harvard University, published “The Pursuit of Power Corrupts: How Investing in Outside Options Motivates Opportunism in Relationships” on March 12, 2012 in Administrative Science Quarterly. To view other OnlineFirst articles, please click here.
Across three laboratory studies, this paper illustrates how a common strategic decision aimed at increasing one’s own power—investing in outside options—can lead to opportunistic behavior in exchange relationships. We show that the extent to which individuals have invested in creating outside options increases the likelihood that they will exploit their current exchange partners, even after controlling for the leverage provided by the outside options. Our results demonstrate that having previously sunk investments in an outside option leads to a heightened sense of entitlement, even when the outside option has been foregone. In turn, feelings of entitlement result in higher aspirations for what is to be gained in the current relationship, and these aspirations fuel opportunism. Finally, we show that other parties may fail to anticipate these effects, leaving them vulnerable to exploitation.
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