Scarcity as a concept in social psychology operates 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. 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. These perceptions of scarcity can lead to irregular consumer behavior, such as systemic errors or cognitive bias. 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, the 'product' in short supply can also be abstract ideas such as time or energy.
Examples
This idea is embedded in the "Black Friday" shopping experience that many United States consumers participate in every year on the day after Thanksgiving. More than getting a lower price on a great gift, shoppers want the competition of obtaining the product. 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. 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. Scarcity can affect the minds of consumers. The spontaneous, limited release of "Busch Apple" is a modern-day example of scarcity. In the summer of 2020, Anheuser-Busch unveiled a new, limited-edition beer; Busch Apple (Busch Light Apple). The limited release prompted consumers to purchase it in higher quantities due to its limited supply and high demand. Additional evidence of this is in 2021 when Busch Apple returned to stores, where over one million cases were sold in the United States. This, of course, is due to the item being scarce, having the ability to cause one’s brain to perceive the item at a higher value. Scarcity of time can be a less-visible and highly pervasive psychological phenomenon that can affect everyday decisions. People who constantly feel pressed for time report higher levels of stress when making everyday decisions and less satisfaction with life overall.
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. 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. 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. This, similarly to hoarding, often stems from a sense of urgency that develops when an item is perceived to be scarce.
Lack of Empathy A study on perceived scarcity of time in subjects known as The Good Samaritan study illustrated that when people are feeling pressed for time, they have less empathy for people around them in need. This study has been repeated in various ways and has consistently demonstrated that people on average are less willing to help others when they believe time is scarce.
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. According to Robert Cialdini, the scarcity heuristic leads us to make biased decisions on a daily basis. 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:
… excerpt ends here. Continue reading the full article.
