Self Esteem, Social Comparison and the Compromise Effect

Abstract

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Advancements in technology is allowing individuals and businesses to connect with each other in hitherto seen unprecedented levels via various modes of media such as advertisements, social media and targeted marketing. Increased rate of exposure to societal ideals increases the comparison rate individuals make between themselves and their immediate world to form their own self-view and influence their self-esteem. How does self-esteem and social comparisons influence our decisions? For example, how does an Instagram celebrity influence a decision to book the same or different hotel as them? Or, how do attractive members at a gym influence a decision to join the same or different gym? This paper explores the effect self-esteem and social comparison have on making a final decision. It aims to identify the difference in behavior between low and high self-esteem individuals and which group is more vulnerable to influence via social comparisons. Part one of this paper explores the effect self-esteem level has on the compromise effect, a marketing technique used to influence consumers to purchase a compromise choice among several options. Part two explores the effect social comparison has on the compromise effect.