poor and you could say that they differ in things like health and education,” Shafir explained to the American Psychological Association’s Monitor on Psychology. “Obviously, in that experiment, we controlled for everything we could, but at the end of the day, these are rich vs. In experiments, they found that poor individuals were less likely to make accurate decisions in the face of a challenging financial situation, even though the poor participants had the same levels of fluid intelligence as the wealthier participants. Shafir and Sendhil suggest that since so much of a person’s cognitive resources are consumed with scarcity, there is less brainpower available for other aspects of life. Psychologist Eldar Shafir and economist Sendhil Mullainathan have found that when people feel they are lacking something, whether it is money, love, or material items, their mental abilities are less efficient and more prone to errors. If you’ve ever felt a sense of urgency to make a purchase before a sale ends or before a product runs out, you’ve just been influenced by the scarcity principle.īut scarcity doesn’t just drive people to buy things they normally wouldn’t or rate things as more desirable that they would be otherwise – it also makes people more likely to make mistakes and bad decisions. Such statements urge you to get in on the offer while there’s still time to add the item to you online cart and click purchase before someone else beats you to it. Marketers are also well-aware of this tendency and use it often to advertise and sell products and services.Ĭonsider how often you see or hear the following types of phrases each and every day: People tend to place a higher value on items that are scarce, while placing a lower value on items that are plentiful. Why is it that when we learn something is scarce or limited, we suddenly want it more? Psychologists refer to this tendency as the scarcity principle, sometimes referred to as the scarcity technique or feigned scarcity. 5 PSYCHOLOGY PRINCIPLES in Digital Marketing That Case BOOST Campaign Impact īrowsing through the weekly ad for your local grocery store, you notice that several items have a large notation beside them stating “Limited Quantity!” Suddenly, you find yourself wanting to rush down to the market and get some of the peaches, strawberries, and plum that the store assures you are in short supply.
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