Grandiose narcissism is characterized by ambivalent interaction behavior (i.e., grandiose self-presentation and rivalrous devaluation of others) and strong oscillations in self-esteem over time. In the light of emotional and social problems associated with these self-esteem regulation patterns and the increasing prevalence of narcissistic tendencies, causal and formalized models for prevention and intervention are needed. Here, we present a computational model of narcissistic self-esteem regulation implementing established, verbal theories of narcissism to identify key etiological and disorder-maintaining mechanisms. Across four studies, we show that parental praise and overvaluation lead to typical grandiose-narcissistic behavioral patterns (i.e., entitled self-presentation and rivalry) and strong self-esteem oscillations. Underlying these phenomena, we identify two maintaining mechanisms that offer targets for intervention and empirical falsification: tolerance development, characterized by an ever-increasing desire for social recognition, and a vicious cycle of rivalry, characterized by the frequent use of other-devaluing behavior and massive drops in self-esteem.