Scarcity bias: A once in a lifetime read
You are sitting in a restaurant about to order your regular breakfast option, the eggs Benedict. The waiter comes over to inform you, just before you order, that there are only three croissants left. Suddenly, you feel as though you are missing out on a popular breakfast option so order a filled croissant instead. In this moment, you’ve just succumbed to scarcity bias.
Scarcity bias is the inferred higher value of resources that we believe to be in limited supply, high demand, or somehow existing only within a small window of time. If you pay a visit to Amazon or Booking.com, you are likely to realise that marketers leverage this bias in their adverts all the time: “Only four left in stock!”, “Limited time offer!” or “This offer expires in three hours”. And scarcity bias is not just at play when we are buying croissants, but apparently, when we are eating cookies too! A famous experiment by Stephen Worchel and colleagues recruited 200 undergraduate students and asked them to rate the quality of a batch of cookies. The participants tasted cookies from a glass jar containing either ten or two cookies. When the cookies were in scarce supply, they were rated significantly more likeable and attractive not to mention that the participants were willing to pay 11% more for them.
If it were some 10 000 years ago, the scarcity bias would work to our benefit, because the resources that we would perceive to be scarce, like wild boar or water, really would be scarce. However, with a supermarket on just about every corner, this evolutionary bias can work against us in a number of ways. First, as demonstrated in the study, it can cause us to pay irrational sums of money for that good or resource. Second, scarcity bias can pander to our sense of greed by leading us to hoard more of the resource than we need. And thirdly, it can cause us to overvalue that resource at the expense of others, for example, our time, which has been termed opportunity cost. In other words, opportunity cost means we waste our time standing in line for the latest IPhone or limited edition Nike sneakers, when our brain’s impressive computing power is actually best spent doing something else.
Now, no one is immune to scarcity bias and, like many other cognitive biases, the first step to combating it, is recognising its existence. A ‘sanity check’ is useful here, which could involve reminding yourself that we live in a world of abundance and not scarcity. If that doesn’t do the trick, consider asking yourself whether or not the item you are about to purchase lines up with your goals. If the answer is ‘nope’, then perhaps it is time to take a step (or fifty) back and leave those last three boxes of cookies on the shelf.
Read more about Worshel’s experiment here.
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