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

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.