(I am not a statistician)
Have understood you correctly
IV1 = continuous variable created from two rating measures, self-perceived and peer-rated social-competence
IV2 = binary dummy variable created from peer rated social competence rating
DV = peer directed aggression measure
My first pass thought it is that I would try and fit the two original ratings measures rather than create a new measure out of the two of them. It seems simpler to me, both in terms of analysis and in terms of interpretation.
What does the combined measure gain you over the two original measures?
What is the correlation between the two ratings measures? Would there be problems of collinearity?