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In this study, we examine the relationship between employee perceptions of supervisor abuse, emotional exhaustion, psychological entitlement, and subsequent co‐worker abuse. We hypothesize that higher levels of employee psychological entitlement moderate the abusive supervisor – emotional exhaustion relationship – and this interaction mediates the abusive supervision – co‐worker abuse relationship. Using multilevel‐moderated mediation analysis to analyse day‐level survey data from a lagged panel design across five working days from 132 working adults and their co‐workers across multiple industries, we found support for our hypothesized model. We discuss implications for theory, future research, and management practice that result from our study.

• Psychologically entitled employees who perceive more abusive supervision are more emotionally exhausted and more likely to …