Scarcity (social psychology)

Last updated December 13, 2023

Scarcity, in the area of social psychology, works much like scarcity in the area of economics. Scarcity is basically how people handle satisfying themselves regarding unlimited wants and needs with resources that are limited.^[1] Humans place a higher value on an object that is scarce, and a lower value on those that are in abundance. For example diamonds are more valuable than rocks because diamonds are not as abundant.^[2] These perceptions of scarcity can lead to irregular consumer behavior, such as systemic errors or cognitive bias.^[3]^[4]

There are two social psychology principles that work with scarcity that increase its powerful force. One is social proof. This is a contributing factor to the effectiveness of scarcity because if a product is sold out, or inventory is extremely low, humans interpret that to mean the product must be good since everyone else appears to be buying it. The second contributing principle to scarcity is commitment. If someone has already committed themselves to something, and then finds out they cannot have it, it makes the person want the item more.

Although people usually think of scarcity in a physical manner, it is important to note that the 'product' in short supply can also be abstract ideas such as time or energy.

Examples

This idea is deeply embedded in the intensely popular "Black Friday" shopping extravaganza that many United States consumers participate in every year on the day after Thanksgiving. More than getting a bargain on a great gift, shoppers thrive on the competition itself, which is obtaining the scarce product.^[5]

Another example of the effects of scarcity is the phenomenon of panic buying, which drives people to display hoarding behaviors when faced with the possibility of going without a certain product.^[6] Historically, panic buying was seen during the COVID-19 pandemic in 2020. Due to the pandemic, people panic bought toilet paper out of fear of limited product supply, creating a shortage.

Effects of scarcity in humans

Scarcity of resources can create frustration due to the inability to obtain the coveted item.

Hoarding

Scarcity is also considered by some to encourage hoarding behavior.^[6] Researchers have found that when consumers are faced with perceived scarcity, they may become overwhelmed by the fear of needing an item and not having it. This can lead to unnecessary buying and hoarding of items that are already in short supply.^[7] This in turn creates a cycle of scarcity in which people are so afraid of going without a needed item, they buy all they are able, thus furthering the actual scarcity of the item.

Impulse buying

Impulse buying can also be a side effect of perceived scarcity. When people are faced with the possibility of having to go without an item, they often times will buy it, with no regard to whether or not it is actually needed.^[5] This, similarly to hoarding, often stems from a sense of urgency that develops when an item is perceived to be scarce.^[8]

Heuristics

Heuristics are basically mental shortcuts to be able to make judgement calls quickly. We use heuristics to speed up our decision-making process when an exhaustive, deliberative process is perceived to be impractical or unnecessary. Thus heuristics are simple, efficient rules, which have developed through either evolutionary proclivities or past learning. While these “rules” work well in most circumstances, there are certain situations where they can lead to systemic errors or cognitive bias.^[4]

According to Robert Cialdini, the scarcity heuristic leads us to make biased decisions on a daily basis.^[9] It is particularly common to be biased by the scarcity heuristic when assessing quantity, rarity, and time.

Quantity

The simplest manifestation of the scarcity heuristic is the fear of losing access to some resource resulting from the possession of a small or diminishing quantity of the asset. For example, your favorite shirt becomes more valuable when you know you cannot replace it. If you had ten shirts of the same style and color, losing one would likely be less distressful because you have several others to take its place.

Rarity

Objects can increase in value if they have unique properties, or are exceptionally difficult to replicate. Collectors of rare baseball cards or stamps are simple examples of the principle of rarity.

Time

When faced with a short amount of time, the decision may be rushed and made in haste, leaving room for error in decision making.

Studies

Numerous studies have been conducted on the topic of scarcity in social psychology:

Scarcity rhetoric in a job advertisement for restaurant server positions has been investigated. Subjects were presented with two help-wanted ads, one of which suggested numerous job vacancies, while the other suggested that very few were available. The study found that subjects who were presented with the advertisement that suggested limited positions available viewed the company as being a better one to work for than the one that implied many job positions were available. Subjects also felt that the advertisement that suggested limited vacancies translated to higher wages. In short, subjects placed a positive, higher value on the company that suggested that there were scarce job vacancies available.^[10]
Another study examined how the scarcity of men may lead women to seek high-paying careers and to delay starting a family. This effect was driven by how the sex ratio altered the mating market, not just the job market. Sex ratios involving a scarcity of men led women to seek lucrative careers because of the difficulty women have in finding an investing, long-term mate under such circumstances.^[11]

Conditional variations

Although the scarcity heuristic can always affect judgment and perception, certain situations exacerbate the effect. New scarcity and competition are common cases.

New scarcity

New scarcity occurs when our irrational desire for limited resources increases when we move from a state of abundance to a state of scarcity.^[12] This is in line with psychological reactance theory, which states that a person will react strongly when they perceive that their options are likely to be lessened in the future.

Worchel, Lee & Adewole (1975) demonstrated this principle with a simple experiment. They divided people into two groups, giving one group a jar of ten cookies and another a jar with only two cookies. When asked to rate the quality of the cookie the group with two, in line with the scarcity heuristic, found the cookies more desirable. The researchers then added a new element. Some participants were first given a jar of ten cookies, but before participants could sample the cookie, experimenters removed 8 cookies so that there were again only two. The group first having ten but then were reduced to two, rated the cookies more desirable than both of the other groups.

Competition

In situations when others are directly competing for scarce resources, the value we assign to objects is further inflated. Advertisers commonly take advantage of scarcity heuristics by marketing products as “hot items” or by telling customers that certain goods will sell out quickly.

In 1983, Coleco Industries marketed a soft-sculpted doll that had exaggerated neonatal features and came with "adoption papers". Demand for these dolls exceeded expectations, and spot shortages began to occur shortly after their introduction to the market. This scarcity fueled demand even more and created what became known as the Cabbage Patch panic (Langway, Hughey, McAlevey, Wang, & Conant, 1983). Customers scratched, choked, pushed, and fought one another in an attempt to get the dolls. Several stores were wrecked during these riots, so many stores began requiring people to wait in line (for as long as 14 hours) in order to obtain one of the dolls. A secondary market quickly developed where sellers were receiving up to $150 per doll. Even at these prices, the dolls were so difficult to obtain that one Kansas City postman flew to London to get one for his daughter (Adler et al., 1983).
— Lynn (1992)

Effects of scarcity in animals

Scarcity is not only seen in humans. It can also be seen in the behavior of animals. In fact, one example of scarcity in animals is water. Livestock animals have bodies that are more than half water in volume. The smaller and indigenous animals are more tolerant due to their size. The smaller animals require less water and are better able to survive in areas where water is scarce.^[13]

Hoarding is also found in some species of birds and even rodents. This hoarding is typically food. The birds and rodents commonly store up food and hide it in a place that is out of reach for other animals.^[14]

Scarcity mentality

Scarcity can be more than a physical limitation. It also involves the frontal lobe in the brain, which is in charge of making decisions. It can also affect how people think and feel.^[15] When there are not enough resources, whether financial or time, challenges are created for the human cognitive system. This presents problems such as impulsive behavior which likely impairs performance. These people also exhibit lowered intellectual abilities and more forgetful behaviors. With these impairments and deficits, performance is actually lowered and that causes behaviors that actually worsen the effects of scarcity.^[16]

Related Research Articles

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Social psychology is the scientific study of how thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others. Social psychologists typically explain human behavior as a result of the relationship between mental states and social situations, studying the social conditions under which thoughts, feelings, and behaviors occur, and how these variables influence social interactions.

A cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own "subjective reality" from their perception of the input. An individual's construction of reality, not the objective input, may dictate their behavior in the world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, and irrationality.

A heuristic, or heuristic technique, is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediate, short-term goal or approximation. Where finding an optimal solution is impossible or impractical, heuristic methods can be used to speed up the process of finding a satisfactory solution. Heuristics can be mental shortcuts that ease the cognitive load of making a decision.

Psychological pricing is a pricing and marketing strategy based on the theory that certain prices have a psychological impact. In this pricing method, retail prices are often expressed as just-below numbers: numbers that are just a little less than a round number, e.g. $19.99 or £2.98. There is evidence that consumers tend to perceive just-below prices as being lower than they actually are, tending to round to the next lowest monetary unit. Thus, prices such as $1.99 may to some degree be associated with spending $1 rather than $2. The theory that drives this is that pricing practices such as this cause greater demand than if consumers were perfectly rational. Psychological pricing is one cause of price points.

The availability heuristic, also known as availability bias, is a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision. This heuristic, operating on the notion that, if something can be recalled, it must be important, or at least more important than alternative solutions not as readily recalled, is inherently biased toward recently acquired information.

The representativeness heuristic is used when making judgments about the probability of an event being representional in character and essence of known prototypical event. It is one of a group of heuristics proposed by psychologists Amos Tversky and Daniel Kahneman in the early 1970s as "the degree to which [an event] (i) is similar in essential characteristics to its parent population, and (ii) reflects the salient features of the process by which it is generated". The representativeness heuristic works by comparing an event to a prototype or stereotype that we already have in mind. For example, if we see a person who is dressed in eccentric clothes and reading a poetry book, we might be more likely to think that they are a poet than an accountant. This is because the person's appearance and behavior are more representative of the stereotype of a poet than an accountant.

The anchoring effect is a psychological phenomenon in which an individual's judgements or decisions are influenced by a reference point or "anchor" which can be completely irrelevant. Both numeric and non-numeric anchoring have been reported in research. In numeric anchoring, once the value of the anchor is set, subsequent arguments, estimates, etc. made by an individual may change from what they would have otherwise been without the anchor. For example, an individual may be more likely to purchase a car if it is placed alongside a more expensive model. Prices discussed in negotiations that are lower than the anchor may seem reasonable, perhaps even cheap to the buyer, even if said prices are still relatively higher than the actual market value of the car. Another example may be when estimating the orbit of Mars, one might start with the Earth's orbit and then adjust upward until they reach a value that seems reasonable.

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Salience is that property by which some thing stands out. Salient events are an attentional mechanism by which organisms learn and survive; those organisms can focus their limited perceptual and cognitive resources on the pertinent subset of the sensory data available to them.

In psychology, a heuristic is an easy-to-compute procedure or rule of thumb that people use when forming beliefs, judgments or decisions. The familiarity heuristic was developed based on the discovery of the availability heuristic by psychologists Amos Tversky and Daniel Kahneman; it happens when the familiar is favored over novel places, people, or things. The familiarity heuristic can be applied to various situations that individuals experience in day-to-day life. When these situations appear similar to previous situations, especially if the individuals are experiencing a high cognitive load, they may regress to the state of mind in which they have felt or behaved before. This heuristic is useful in most situations and can be applied to many fields of knowledge; however, there are both positives and negatives to this heuristic as well.

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Heuristics is the process by which humans use mental shortcuts to arrive at decisions. Heuristics are simple strategies that humans, animals, organizations, and even machines use to quickly form judgments, make decisions, and find solutions to complex problems. Often this involves focusing on the most relevant aspects of a problem or situation to formulate a solution. While heuristic processes are used to find the answers and solutions that are most likely to work or be correct, they are not always right or the most accurate. Judgments and decisions based on heuristics are simply good enough to satisfy a pressing need in situations of uncertainty, where information is incomplete. In that sense they can differ from answers given by logic and probability.

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In behavioural sciences, social rationality is a type of decision strategy used in social contexts, in which a set of simple rules is applied in complex and uncertain situations.

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References

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↑ Mittone & Savadori (2009).
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1 2 Gigerenzer (1991).
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↑ Durante, Kristina M.; Griskevicius, Vladas; Simpson, Jeffry A.; Cantú, Stephanie M.; Tybur, Joshua M. (2012). "Sex ratio and women's career choice: Does a scarcity of men lead women to choose briefcase over baby?". Journal of Personality and Social Psychology. 103 (1): 121–134. doi:10.1037/a0027949. PMID 22468947.
↑ Cialdini (2001), p. 47.
↑ Akinmoladun, Oluwakamisi F.; Muchenje, Voster; Fon, Fabian N.; Mpendulo, Conference T. (July 2019). "Small Ruminants: Farmers' Hope in a World Threatened by Water Scarcity". Animals. 9 (7): 456. doi: 10.3390/ani9070456 . PMC 6680725 . PMID 31323882.
↑ Jenkins, Stephen H.; Breck, Stewart W. (December 3, 1998). "Differences in food hoarding among six species of heteromyid rodents". Journal of Mammalogy. 79 (4): 1221–1233. doi: 10.2307/1383013 . JSTOR 1383013.
↑ "Brain Anatomy and How the Brain Works". John Hopkins Medicine. July 14, 2021.
↑ Zhao, Jiaying; Tomm, Brandon M. (February 26, 2018). "Psychological Responses to Scarcity". Oxford Research Encyclopedia of Psychology. doi:10.1093/acrefore/9780190236557.013.41. ISBN 978-0-19-023655-7.

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