Why do we get embarrassed?

Embarrassment is a punishment that we impose on ourselves to prevent "socially unacceptable" behavior. The problem is that we each have our own definitions of what is socially acceptable. For example, people feel different levels of embarrassment about asking someone out on a date. Those with fewer inhibitions are more likely to actually ask, while those who are more self-conscious may get stuck wrestling through mental barriers.

When you feel embarrassed is it because you feel embarrassed or is because you think other people think you should feel embarrassed?

By taking ownership of when you feel embarrassed, you're more likely to get what you want. Understandably this isn't completely possible, since embarrassment is deeply tied to how we perceive what others think of us. But, by striving to own this internal process, you're in greater control of your own happiness.