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People use social comparisons to reduce uncertainty when facing new or stressful situations. This study explores how a stressful experience, the COVID-19 pandemic, changed how people compare their income. It relates these changes to subjective well-being (SWB). We use a repeated cross-sectional dataset of students at two German universities from before and during the pandemic. A novel survey instrument is employed to identify individualized reference groups used for income comparison and to analyze whether the comparison pattern changed. Our results reveal that, while there was little change in the size of the reference groups, there was some difference in the group composition. During the pandemic, survey respondents were more likely to select two types of individuals into their reference groups: relatives and people they only knew from social media. Income comparisons were beginning to have a negative association with SWB, while the relation had been positive before the pandemic. Moreover, upward income comparisons increased.

Recent research shows that audiences sometimes respond to organizational performance in ways that seem anomalous according to prior theory. In this paper we propose that variations in the extent to which an organization conforms to the norms and expectations of a known organizational category can affect the way evaluators construct reference groups, and subsequently shape their responses to organizational performance. In an experiment on investing in and evaluating the performance of a certain kind of financial organization, we show that organizational atypicality increases an evaluator’s likelihood of choosing a nonconforming referent for the purpose of making (enhancing) evaluations of the organization’s performance. Evaluators’ ex ante feelings of commitment toward the organization further moderate this relationship. Our results have several implications for research related to organizational and categorical identity, performance evaluation, and judgment and decision making. The online appendix is available at https://doi.org/10.1287/orsc.2017.1154 .

ABSTRACT Lower class students are less likely to attend university than their higher class counterparts, even adjusting for academic performance. I argue this is due to “status beliefs” – widely-held views that high status individuals (e.g. men, ethnic majorities, higher class) are generally more competent than low status individuals (e.g. women, ethnic minorities, lower class). Lower class students are therefore attributed, and internalise, lower expected academic competence due to their low status position, regardless of true ability. However, studying the effect of status beliefs is difficult, since it is hard to identify contexts where status beliefs vary and yet objective characteristics do not. My solution is to leverage variation in a student’s reference group. I argue that when a lower class student is placed in a (relatively) higher class classroom, they are seen, by themselves and others, as subjectively more lower class than if they were placed in a lower class classroom. Since they are seen as lower class, they internalise negative status beliefs about lower class people. I present two studies, one applying a quasi-experimental design to observational data, and the other a vignette method, that provide complementary evidence that status beliefs are a consequential factor in determining educational inequality.

Goals or aspirations and their relationships to risk taking and performance are important issues in both psychology and strategic management. The concept of adaptive aspirations, as discussed in Cyert and March's Behavioral Theory of the Firm, has long been a topic of interest in both fields. Moreover, many studies in strategy have focused on risk and/or extreme performance. In the current paper, we build on earlier models of adaptive aspirations. We introduce into the models a new risk preference function that incorporates changes in risk preference at extremes of performance. Based on empirical studies and the managerial literature, we also introduce alternative strategies for setting reference groups. Simulations of the resulting models suggest important differences in outcomes from earlier studies and this invites further empirical investigation. These simulations also have significant implications for managerial goal setting.

This study aims to understand how prospective first-generation college students develop their perceptions of college engagement before college attendance through secondary sources. A group of high school students were assigned to read a college-themed mystery novel and rank a series of statements relating to college engagement before and after the activity. Viewpoints of college engagement shifted from a solely academic focus to a more holistic focus after reading the novel. Enjoyment and relatability of the novel were major factors contributing to the shift in viewpoints. Findings suggest that college preparation programs need to expand beyond academics to include social and emotional components through engaging mediums.

There are ample evidences that individual satisfaction does not depend exclusively on individual situation (namely on individual income and leisure) but also on one’s relative position, namely on how one’s situation lies relatively to the situation of other referent agents (Clark and Oswald in J Public Econ 61(3):359–381, 1996. doi:10.1016/0047-2727(95)01564-7; Solnick and Hemenway in J Econ Behav Organ 37(3):373–383, 1998. doi:10.1016/S0167-2681(98)00089-4; Luttmer in Q J Econ 120(3):963–1002, 2005. doi:10.1162/003355305774268255). The study of relative concerns is rich (Clark et al. in J Econ Lit 46(1):95–144, 2008. doi:10.1257/jel.46.1.95; Clark and Senik in Econ J 120(544):573–594, 2010. doi:10.1111/j.1468-0297.2010.02359.x; Solnick and Hemenway 1998) but still the relationship between relative concerns and the size of the reference group is still unexplored. In this paper, we elicit individuals’ relative concerns and we manipulate the size of the reference group (single reference agent vs. multiple reference agents). We conduct two studies, one in which we manipulate the size of the reference group (Study One) and another one in which we control for the identity of the reference group and modulate the size (Study Two). In both studies, we find that the size of the reference group modulates relative preferences. Interestingly, we show that individuals are more likely to prefer Pareto efficient situations and less likely to exhibit relative concerns when the reference group is of small size.

This paper uses relatively large-scale internet survey data from Japan to analyse income comparisons and income satisfaction. In contrast to the vast majority of empirical work in the area of subjective well-being, we are able to measure both the direction (to whom?) and intensity (how much?) dimensions of income comparisons. Relative to Europeans, the Japanese compare more to friends and less to colleagues, and compare their incomes more. The relationship between satisfaction and reference-group income is negative and more negative for those who say that they compare their incomes more. Our main finding concerns the measure of the relevant reference-group income. It is common in non-experimental work to calculate “others’ income” as some conditional or unconditional cell-mean, with the cells being defined by neighbourhood, workplace or demographic type. We show that two such cell-mean measures (one from within the dataset, the other matched in from external sources) fit the well-being data worse than does a simple self-reported measure of what relevant others earn. The self-reported measure of others’ income would arguably make a useful addition to many existing surveys.

This paper introduces and empirically explores the concept of an organizational reference group: the set of people an individual perceives as belonging to his or her work environment that defines the social world of work in which he or she engages. The concept is proposed to fill a gap in studies of social context. Scholars tend only to infer, not identify, the people an individual is aware of at work. This surmise creates no problem in groups or small organizations where everyone knows everyone else. However, it becomes troublesome in large organizations where the set of people one individual discerns may vary considerably from that of another. Social network studies of large organizations examine people an individual perceives, but focus on interpersonal communication through salient relationships. They tend to neglect the many distant others who populate an individual's social context: those known only through company newsletters or office gossip, those with whom the individual never has contact, and those who carry little immediate salience. Data from a large organization are used to explore whether organizational reference groups provide distinct, useful information about individuals' perceptions of their social context at work. The findings replicate those showing individuals' preferences for similar others, but also note previously unobserved systematic differences in the composition of close associations compared to the broader ones of organizational reference groups. Distant associations are considerably more homogeneous than close ones. Moreover, the results show that organizational reference groups illuminate career referent selection and expected achievement beyond what would be learned from a typical social network analysis.

This paper aims at studying the connection between reference group income and life satisfaction in the three republics of the South Caucasus: Armenia, Azerbaijan, and Georgia. I illustrate that in low-income transition economies individuals make not only upward comparisons, decreasing their subjective well-being if the reference group members are richer than they are, but also downward comparisons, enhancing their subjective well-being if the reference group members are poorer. This result contradicts Duesenberry’s idea that comparisons are mostly upward.

The present paper tries to answer analytically how much the reference group influence can affect an actual market share of a particular brand or product. It is found that the increase of the size of a reference group and the probability of following the majority within the reference group may lead to the temporary modest prevalence of one brand. This result requires a relatively large size of a reference group and a high probability of following the majority within the reference group. If these conditions are not satisfied the effect on the market share is negligible.