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Scarcity

32 Post author: Eliezer_Yudkowsky 27 March 2008 08:07AM

What follows is taken primarily from Robert Cialdini's Influence: The Psychology of Persuasion.  I own three copies of this book, one for myself, and two for loaning to friends.

Scarcity, as that term is used in social psychology, is when things become more desirable as they appear less obtainable.

  • If you put a two-year-old boy in a room with two toys, one toy in the open and the other behind a Plexiglas wall, the two-year-old will ignore the easily accessible toy and go after the apparently forbidden one.  If the wall is low enough to be easily climbable, the toddler is no more likely to go after one toy than the other.  (Brehm and Weintraub 1977.)  
  • When Dade County forbade use or possession of phosphate detergents, many Dade residents drove to nearby counties and bought huge amounts of phosphate laundry detergents.  Compared to Tampa residents not affected by the regulation, Dade residents rated phosphate detergents as gentler, more effective, more powerful on stains, and even believed that phosphate detergents poured more easily.  (Mazis 1975, Mazis et. al. 1973.)

Similarly, information that appears forbidden or secret, seems more important and trustworthy:

  • When University of North Carolina students learned that a speech opposing coed dorms had been banned, they became more opposed to coed dorms (without even hearing the speech).  (Probably in Ashmore et. al. 1971.)  
  • When a driver said he had liability insurance, experimental jurors awarded his victim an average of four thousand dollars more than if the driver said he had no insurance.  If the judge afterward informed the jurors that information about insurance was inadmissible and must be ignored, jurors awarded an average of thirteen thousand dollars more than if the driver had no insurance.  (Broeder 1959.)  
  • Buyers for supermarkets, told by a supplier that beef was in scarce supply, gave orders for twice as much beef as buyers told it was readily available.  Buyers told that beef was in scarce supply, and furthermore, that the information about scarcity was itself scarce—that the shortage was not general knowledge—ordered six times as much beef.  (Since the study was conducted in a real-world context, the information provided was in fact correct.)  (Knishinsky 1982.)

The conventional theory for explaining this is "psychological reactance", social-psychology-speak for "When you tell people they can't do something, they'll just try even harder."  The fundamental instincts involved appear to be preservation of status and preservation of options.  We resist dominance, when any human agency tries to restrict our freedom.  And when options seem to be in danger of disappearing, even from natural causes, we try to leap on the option before it's gone.

Leaping on disappearing options may be a good adaptation in a hunter-gatherer society—gather the fruits while the tree is still in bloom—but in a money-based society it can be rather costly.   Cialdini (1993) reports that in one appliance store he observed, a salesperson who saw that a customer was evincing signs of interest in an appliance would approach, and sadly inform the customer that the item was out of stock, the last one having been sold only twenty minutes ago.  Scarcity creating a sudden jump in desirability, the customer would often ask whether there was any chance that the salesperson could locate an unsold item in the back room, warehouse, or anywhere.  "Well," says the salesperson, "that's possible, and I'm willing to check; but do I understand that this is the model you want, and if I can find it at this price, you'll take it?"

As Cialdini remarks, a chief sign of this malfunction is that you dream of possessing something, rather than using it.  (Timothy Ferriss offers similar advice on planning your life: ask which ongoing experiences would make you happy, rather than which possessions or status-changes.)

But the really fundamental problem with desiring the unattainable is that as soon as you actually get it, it stops being unattainable.  If we cannot take joy in the merely available, our lives will always be frustrated...

 

Part of the Joy in the Merely Real subsequence of Reductionism

Next post: "To Spread Science, Keep It Secret"

Previous post: "Is Humanism A Religion-Substitute?"


Ashmore, R. D., Ramachandra, V. and Jones, R. A. (1971.) "Censorship as an Attitude Change Induction."  Paper presented at Eastern Psychological Association meeting, New York, April 1971.

Brehm, S. S. and Weintraub, M. (1977.) "Physical Barriers and Psychological Reactance: Two-year-olds' Responses to Threats to Freedom."  Journal of Personality and Social Psychology, 35: 830-36.

Broeder, D. (1959.)  "The University of Chicago Jury Project." Nebraska Law Review 38: 760-74.

Cialdini, R. B. (1993.)  Influence:  The Psychology of Persuasion: Revised Edition.  Pp. 237-71.  New York: Quill.

Knishinsky, A. (1982.)  "The Effects of Scarcity of Material and Exclusivity of Information on Industrial Buyer Perceived Risk in Provoking a Purchase Decision."  Doctoral dissertation, Arizona State University.

Mazis, M. B. (1975.) "Antipollution Measures and Psychological Reactance Theory: A Field Experiment." Journal of Personality and Social Psychology 31: 654-66.

Mazis, M. B., Settle, R. B. and Leslie, D. C. (1973.) "Elimination of Phosphate Detergents and Psychological Reactance."  Journal of Marketing Research 10: 390-95.

Comments (18)

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Comment author: james5 27 March 2008 08:52:39AM 0 points [-]

haha, reminds me of when i first got my gmail account almost four years ago. ah, but i still love it. i guess this theory explains why i keep my hotmail accounts even though i don't use them anymore--they were grandfathered over from when syncing with outlook was free.

Comment author: Tim_Tyler 27 March 2008 01:24:51PM -1 points [-]

Have social psychologists really attempted to redefine the term scarcity? It seems like a particularly stupid thing to do.

Comment author: DanielLC 04 March 2012 07:01:51PM 1 point [-]

Why? I know economists redefined it.

Comment author: bobvis 27 March 2008 01:32:53PM 3 points [-]

Buyers for supermarkets, told by a supplier that beef was in scarce supply, gave orders for twice as much beef as buyers told it was readily available.

In the defense of consumers, this behavior is in fact rational. A shortage increases the likelihood of a stockout in the near future, so it behooves you to buy more now when you can so you can maintain your own personal inventory and avoid the consequences of the coming stockout. This behavior is one cause of the Bullwhip Effect.

Comment author: RobinHanson 27 March 2008 02:03:51PM 13 points [-]

This is better described as a "noisy clue" than a "bias." On average the fact that something is rare, in demand, or hidden on purpose is in fact a reason to be more interested in it. Of course sometimes people can use our willingness to follow noisy clues to fool us.

Comment author: Silas 27 March 2008 02:26:12PM 2 points [-]

Of course sometimes people can use our willingness to follow noisy clues to fool us.

Right, over time this tactic can become cliche in a given context? I hope I'm not the only one who rolls his eyes when a saleman claims that a certain product model is in short supply. Then again, I just missed a chance to buy a car at the price I wanted by ignoring such a claim and waiting. Or did I (miss a genuine rather than fake chance)?

Comment author: bigjeff5 02 February 2011 10:24:31PM *  2 points [-]

See infomercials. All the effective ones say "but for a limited time only..." and "call while supplies last!" and "we can only guarantee this offer for the next 24 hours..." even though it's the exact same infomercial that has been on at the exact same time every night for a month. I've also never seen one of these products that wasn't "on sale" at some sort of "reduced" price.

They also usually include freebies "worth" hundreds of dollars with an item they are selling for less than $20. I've always wondered that anybody could be stupid enough to think that an item actually worth $100 would be included in a million $20 orders.

Comment author: bipolar2 27 March 2008 05:07:23PM 4 points [-]

I find it unpersuasive; ban the post.

Comment author: Paul_Gowder 27 March 2008 05:59:38PM 6 points [-]

I agree with Bobvis: a LOT of this is rational:

# When University of North Carolina students learned that a speech opposing coed dorms had been banned, they became more opposed to coed dorms (without even hearing the speech). (Probably in Ashmore et. al. 1971.)

This seems straight Bayes to me. The banning of the speech counts as information about the chance that you'll agree with it, and for a reasonably low probability of banning speech that isn't dangerous to the administration (i.e. speech that won't convince), Everyone's Favorite Probability Rule kicks in and makes it totally rational to become more opposed to coed dorms -- assuming, that is, that you believe your chance of being convicted comes largely from rational sources (a belief that practical agents are at least somewhat committed to having).

# When a driver said he had liability insurance, experimental jurors awarded his victim an average of four thousand dollars more than if the driver said he had no insurance. If the judge afterward informed the jurors that information about insurance was inadmissible and must be ignored, jurors awarded an average of thirteen thousand dollars more than if the driver had no insurance. (Broeder 1959.)

This too seems rational, though in this case only mostly, not totally. We can understand jurors as trying to balance the costs and the benefits of the award (not their legal job, but a perfectly sane thing to do). And the diminishing marginal utility of wealth suggests that imposing a large judgment on an insurance company causes less disutility to the person paying (or people, distributing that over the company's clients) than imposing it on a single person. As for the judge's informing the jurors that insurance information is inadmissible, well, again, they can interpret that instruction as information about the presence of insurance and update accordingly. (Although that might not be accurate in the context of how judges give instructions, jurors need not know that.) Of course, it seems like they updated too much, since they increased their awards much more when p(insurance) increased but is less than 1, than they did when they learned that p(insurance)=1. So it's still probably partially irrational. But not an artifact of some kind of magical scarcity effect.

Comment author: Lior 27 March 2008 09:09:29PM 0 points [-]

Bovis,

I believe the irrational part is that the consumer would buy more meat depending of how scarce the information of scarcity was. For example, consumer overheard the butcher talk about meat being scarce so the consumer buys 8 times more instead of 4 times more (if the scarcity of meat was common knowledge).

Comment author: Lior 27 March 2008 09:10:31PM 0 points [-]

Bovis,

I believe the irrational part is that the consumer would buy more meat depending of how scarce the information of scarcity was. For example, consumer overheard the butcher talk about meat being scarce so the consumer buys 8 times more instead of 4 times more (if the scarcity of meat was common knowledge).

Comment author: Grant 28 March 2008 12:24:48AM 2 points [-]

Re: "information that appears forbidden or secret, seems more important and trustworthy" Michael Scheuer says the same thing about how the CIA analyzes data. He claims that public sources are often ignored in favor of confidential ones, even when its irrational to do so.

Comment author: Allan_Crossman 28 March 2008 02:57:22AM 0 points [-]

Minor point to speed up finding the book: I believe (or rather, Google believes) that the correct name is "Influence: The Psychology of Persuasion" (i.e. drop the "Social")

Comment author: burger_flipper2 28 March 2008 12:38:39PM 3 points [-]

Cialdini also seems to have put out the same info in a textbook (which does not read like one) "Influence, Science and Practice." Amazon reviews say it is nearly identical, except it has chapter reviews and problems. I only mention this because this is the version that was available at my 2 nearest library systems. Very good reading a quarter of the way in-- so thanks for the tip.

EY-- what other books are in the "own 3 copy" club?

Comment author: nick4 29 March 2008 01:01:26AM 0 points [-]

Scarce things become objects of envy, increasing social value to ourselves, and they also increases the probable resale value, even in the absence of other information. The scarcity often signals high demand from others, as in the out-of-stock example.

Comment author: eydryan 12 April 2008 10:15:40PM 1 point [-]

I run an SEO blog and it seems the articles that are most unique or are perceived to be less available, or general insider secrets are a lot more read.

Also, things perceived to be wrong create more interest themselves.

Nice article, worth a lot of money to an avid marketer I'd think.

Comment author: [deleted] 10 March 2011 03:13:23PM 9 points [-]

This reminds me that one of the first things I did when I made my account here was to disabled the setting that had me ignore posts that had been downvoted, because I found I was always clicking the link to view them anyway. So downvoting the post actually made me pay more attention to it then a post with no points at all.

Comment author: Bordamere 13 July 2011 08:01:08AM 1 point [-]

I remember that I used to intentionally put some things that I wanted out of reach, so that I still got that feeling of yearning for it, all the while knowing that if I achieved it then it wouldn't be as great. Then I eventually realized that if achieving something lessens the value of it, then I shouldn't really want it in the first place.