yego.me
💡 Stop wasting time. Read Youtube instead of watch. Download Chrome Extension

Francesca Gino: Don't Let Status Anxiety Cloud Your Judgment


2m read
·Nov 4, 2024

One of the factors that derail our decisions has to do with forces from our relationships due to social comparisons. Now, since we are human beings, whenever we try to evaluate ourselves on several dimensions — from how good we are as decision makers to how good we are at solving problems or how creative we are — we look at others: our peers, colleagues, and friends in order to evaluate ourselves.

But those types of social comparisons can come in the way when we are implementing our plans. So, for example, there is some really interesting research coming out of Kellogg showing the following.

Imagine you're an MBA student who graduated recently and you're considering different job offers. The first offer is with a company that you really like, and the job is for $150,000 a year. This is your base salary. And you know that your peers, people who graduated from your own program, are also offered similar jobs for the same compensation: $150,000.

Now, there is a second job offer that you're considering, and it's one where this time you'll be joining a different company, but it's also a company that you very much like. And the salary's a little bit higher. It's $175,000 — so $25,000 higher than the previous one. This time you know that other people like you — peers and graduates from your same program — are being offered similar jobs for $185,000.

What the data suggests is that if you were presented with this situation, you would tend to choose the first job — the one that has a lower salary. And the reason is that the social comparison that is triggered by the second job is making you feel uneasy. So you'd rather go with the job that pays less but knowing that you fare as well when comparing yourself to your peers.

So social comparison can really come in the way of good decision making and can derail us as we implement our plans. So what should we do about that? Once again, the solution is, in a sense, intuitive but difficult to apply. As we're making decisions, we should ask ourselves questions about the information that we are using to make those decisions and whether it's information about ourselves only or if social comparisons are trickling in and affecting the way we are thinking about the problem or the decision itself.

More Articles

View All
10 Ways To Fix Your Poor Mindset
Listen up! Okay, if you want to be in the three percent club one day, pay close attention to what we’re about to say to you. Imagining that you’re going to randomly get rich one day is just a delusion and a sign of an eternally poor mindset. You might nee…
Peter Lynch Warns About the BIG Danger of Index Funds in Recent Interview (2021)
If you’ve been following this channel, you know Peter Lynch is one of my favorite investors to study. However, Peter Lynch hasn’t given an interview in years. So when he finally gave an interview this past week, it got my full attention. In this intervie…
I Watch 3 Episodes of Mind Field With Our Experts & Researchers
(soft music) (eerie sound) Hey Vsauce! Michael here. Every episode of Mind Field is now free to view all over the world, all 24 episodes, all three seasons. Whoa! It is really exciting. And it’s why I’ve invited you here to Vsauce headquarters. Why watch…
Probabilities from density curves | Random variables | AP Statistics | Khan Academy
Consider the density curve below. So we have a density curve that describes the probability distribution for a continuous random variable. This random variable can take on values from 1 to 5 and has an equal probability of taking on any of these values fr…
Why You’ll Regret Buying Stocks In 2022
This is weird. My account must be broken or something. I’m going to call my financial advisor and ask what’s up. Yeah, hey Graham. Well, there are two easy things you can do. The first thing you could do is you could just go over here and make green cand…
How to take AI from vision to practice. Part 1
Welcome everyone! We are so excited for you to be here, uh, to join this amazing conversation. My name is Danielle Sullivan. I’m the senior regional manager of the Northeast Partner District Partnerships at Khan Academy, and I’m really thrilled, uh, that …