The last time you bought anything online, there’s a good chance the website read, “Only 3 items in stock” or “Only 2 left at this price”.
Even if you know that this is all marketing mind games, it’s hard to avoid the stressful feeling you must buy now before it’s too late, right?
This is just one example of scarcity, which is the 6th psychological power of persuasion in Robert Cialdini’s book, Influence.
Opportunities seem more valuable to us when their availability is limited.
Robert Cialdini
Let’s jump right into what scarcity is, how it works, and how to avoid being influenced to make sketchy decisions.
What is scarcity and why does it influence you?
Until now, you might be thinking of scarcity in terms of limited land, labor, oil, or gold. But scarcity isn’t just a theory from economics 101 – it applies to many decisions in your day-to-day.
You can define scarcity as our increased desire for nearly everything we might lose or which has a limited supply.
Limited supply propels demand because our minds are wired to associate limited access with higher quality and importance. Before you know it, scarcity can cause you to focus on things you wouldn’t care for otherwise.
Examples of using scarcity to create (false) urgency
Here are a few examples of how companies use scarcity to create urgency and attract your attention (and dollars):
- Limited edition
- Only 3 left at this price
- Back in stock for a limited time only
- 50 % off the next 48 hours
- Almost sold out
- Sign up now to get a 10% discount
Limited supply combined with competition is scarcity on steroids. Just think about how auctions and flash sales can get people to lose all sensibility. The reaction is immediate because you replace abundance with a “sudden” scarcity.
Something that, on its own merits, held little appeal for me had become decidedly more attractive merely because it would soon become unavailable
Robert Cialdini
Save or lose?
Here’s a quiz for you: Which of these two offers are most effective?
- You can save up to $3,000 per year if you isolate your house.
- You can lose up to $3,000 per year if you don’t isolate your house.
Both promise you the same gain. But the second phrasing is the one that activates our scarcity sensor. Here’s why.
Loss aversion is our preference to avoid losing something compared to gaining something of equal value. Psychologists Amos Tversky and Daniel Kahneman once proved that losing $100 is twice as painful as the pleasure of earning $100. We care more about what we already possess than what we could potentially get.
What’s the problem with scarcity?
As you’ve seen already, scarcity is an enormously influential power that can redirect your mind’s focus and ability away from something more critical.
You could argue that scarcity creates focusing illusion, which is when your mind attaches too much importance to one factor instead of looking at all available data points.
Your mental bandwidth can only handle so much simultaneously, and if you focus on the things you don’t have, you can’t think clearly about anything else. And this causes you to both act and have thoughts that goes against you, as you’ll see in the next part.
Fear of Missing Out
Did you ever exit an interesting conversation only to answer a call on your phone?
Or maybe you’ve felt excluded because you missed out on a night out, a concert, the latest gossip, or not checking your social feed for a day?
Fear of missing out is the sense of scarcity when you worry that your peers:
- Know something you don’t
- Possess more or something you don’t have
- Are up to something exciting while you’re not
That something is secondary; what’s important at the moment is that you feel like you’re missing out on an opportunity.
Other times, you can also FOMO about choosing the wrong or lesser thing – anything from picking the wrong education to second-guessing what you ordered at the restaurant.
In reality, there are often more important things to ponder – and it’s never as bad as we fear to be missing out. It pays to accept that you shouldn’t jump on any opportunity.
Why censorship and bans have the opposite effect
Attempts of control and censorship limit our freedom and thus present another source of scarcity.
The problem is that we will morph into defiant 4-year-olds if someone forbids us to do something. As opportunities become less available, most people feel their freedom diminish. Therefore, bans and censorship have the opposite effect and increase our desire.
It’s funny how scarce things – either in a restricted or exclusive way – make people:
- Want it more
- Feel more inclined and “attracted”
- Believe it’s more important than before
- Find it more persuasive.
When we bleep out swearwords, they become more exciting to learn.
If you can’t buy alcohol before age 21, you might spend hours figuring out creative ways to get your hands on a sixpack.
Guns N’ Roses, once dubbed “the most dangerous band,” intentionally made up a warning and put it on one of their concert posters:
The surgeon general deems Guns N’ Roses bad for your health but worth the risk
Final word
Scarcity is an influential shortcut that helps us decide on quality and value. We generally believe things that are difficult to possess must be better than things that are easy to own.
In conclusion, let’s sum up a few essential parts:
- People are more concerned about keeping or losing than saving or earning
- Relations and possessions are most valuable to you when you fear that you can lose them
- We tend to focus on what we lack instead of what we have
- Scarcity makes you believe that there’s never enough
As you see, scarcity can be very misleading. My take is that there’s just one uniquely scarce thing:
Time.
If you have enough time, you can always build more wealth, get healthier, grow friendships, and even pursue all the FOMO crap you can possibly dream of.
Everything else’s scarcity is debatable.
