Social comparison effects on economic decision-making

The research project explores the consequences of social comparison processes for economic decision-making. Previous research showed that comparing oneself to other persons influences both cognitive evaluations and affective states. So far, however, the impact on decision-making has remained unexplored. The goal of the research project is the development and evaluation of a process model of economic decision-making. This model includes the previous neglected aspect of social comparison and is assumed to improve understanding of economic behavior. The first part of the research project will be the development of a process model describing the influence of social comparisons on decision-making. Two possible effect routes, a cognitive and an affective one, are explored. On the one hand, social comparisons are assumed to influence the reference point for the evaluation of decision options. On the other hand, social comparisons have affective consequences, which are assumed to have specific effects on decisions. Implications of this model for purchase and investment decisions will be elaborated and empirically tested in experimental studies in part two and three of the research project.