The scarcity principle is a psychology heuristic commonly used by people when a high value is assigned to something they perceive as being scarce, or less available. There are countless studies that support the idea of scarce items being seen as more valuable, including a funny 1975 study that found when fewer cookies were in a cookie jar, subjects found them to be tastier when compared to another group of subjects who ate the same cookies, but from a jar that was filled with cookies. The only difference between the experimental and control group was number (not type) of cookies, ruling out nearly every other reason for such an interesting finding. The scarcity principle is not limited to how many cookies are in a cookie jar, however, and we regularly see people quickly scramble to buy items just before being sold out — even if the item itself is of little actual value. What is interesting to note is that the scarcity principle has set us up for the heuristic “if something is rare or scarce, it must be valuable,” yet we know when we apply critical thinking there are countless products around us each day that run out of supply and were not worth anything more as the quantity dwindled. Still, the urge to want to get something before it runs out is very strong. The reality is scarcity prompts an immediate, knee-jerk reaction, and we often take steps to acquire a scarce item even before we have employed critical thinking to evaluate if the item is actually worth it.
Don’t be fooled by scarcity!
We live in a world of both real and imaginary “scarcity,” and in both cases we have the tendency to act before we think through the situation. Some things really do run out (low home interest rates!), but these days there are plenty of manufactured, intentional “low supply” messages solely designed to work on the scarcity principle. The scarcity principle works based on the idea that we do not want to lose a golden opportunity, and what often flows from that idea are endless marketing campaigns around expressions like:
- Limited time!
- Limited supply!
- Limited edition!
- Going out of business!
- Pre-order sales!
- Exclusive memberships and opportunities!
- Event-specific sales! Or any approach to sales that requires you to “buy now” or else forever lose out!
Granted, in some of these examples there really may be a true sense of urgency, but in most cases the scarcity alert is designed to get you to act, and act quickly! And knowing that you do not want to squander a great opportunity, savvy advertisers will pull out all the bells and whistles by means of flashy call-outs, loud music, smoke machines, and anything else that creates enough urgency that you bypass all logical thought — including whether you even need or can store the product! Black Friday, the retail-holiday that used to last but a day, now commonly stretches into 48 and 72 hour windows of discounted shopping periods — and sometimes even longer than that. Here again we see a perfect illustration of the manipulation of scarcity designed to get you to move.
While it is true that some products might become more valuable and important as quantities decrease, in many cases it is our fear of losing out that drives demand, and not the item itself. This is important to know, as we are often in situations where we feel pressured to act immediately — or else! The cookie study showed us that the principle of scarcity is so strong that it can even make cookies seemingly taste better when in short supply, making this one of the more interesting concepts in psychology.