Social comparisons – the assessments we make about how we measure up to others – are key to understanding how status operates in negotiation. These comparisons, which signal concern about relative status, have a profound impact at the bargaining table.
To make social comparisons, first we choose a reference group against which we can measure ourselves. In his book Choosing the Right Pond: Human Behavior and the Quest for Status, Robert Frank, a professor of economics at Cornell University, argued that when it comes to social comparisons, people care most about local status. For this reason, colleagues, classmates, relatives, friends, and neighbors are most typical members of our reference group. We tend to make downward comparisons with those in our immediate sphere, preferring to measure ourselves against those who seem to have achieved less than we have because such comparisons enhance self-esteem. When we can rank ourselves above those who resemble us, we assume local status and prestige.
Whether members of our reference group are participating in a given negotiation or not, we care about how well our results compare to theirs. Social comparisons affect our satisfaction with progress toward negotiation goals, especially when we are psychologically close to those in our reference group and when we operate in the same realm.
For example, you’re likely to be less satisfied with your own achievements after watching a much younger colleague advance quickly up the corporate ladder.
In negotiation, our social comparisons can inspire contentment and pride, prompting easy agreement – or trigger the envy and frustration that can lead to impasse.
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Related Article: Managing Status in Negotiation