Dominance versus Prestige Hierarchies: How Social Hierarchy Base Shapes Conspicuous Consumption

Abstract

Consumers are known to seek out and display conspicuous goods— items that are exclusive and signal wealth and high social standing. Though many factors can drive such conspicuous consumption, the present work looks at an unexplored element: whether consumers find themselves in a dominance versus prestige-based hierarchy. Dominance-based hierarchies encourage consumers to use threatening, assertive and manipulative behaviors to navigate the hierarchy. In contrast, prestige-based hierarchies encourage consumers to show their talent, skills and motivation to operate within the hierarchy. The present research reveals how these two main bases of hierarchy shape consumers’ consumption of conspicuous goods. Specifically, dominance, relative to prestige hierarchies, are proposed to foster greater social anxiety, which leads people to seek conspicuous goods as a means of psychological security. Consequently, dominance-based hierarchies are more likely to encourage conspicuous consumption relative to prestige-based hierarchies. Multiple experiments, which utilize real employees’ behaviors, experimental manipulations of hierarchy, as well as incentivize-compatible decisions, reveal that dominance-based hierarchies, relative to prestige-based hierarchies, increase consumers’ preference for conspicuous goods. Moreover, evidence for a psychological mechanism in the form of social anxiety is demonstrated via both mediation and moderation.