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Just for you: How Scarcity Factors Into Decisions

Rather than invest the time and effort necessary to ponder the pluses and minuses of most decisions, we tend to rely on quick heuristics to make most decisions. These rules of thumb help us save cognitive processing and navigate a world full of choices. Our tendency to make near-automatic decisions exposes us to exploitation by individuals who understand how heuristics work.

In the study below the authors were interested in what role the scarcity principle—the notion that the less available an opportunity appears, the more valuable it becomes—plays in decision compliance and heuristics.

Previously, there were two main ways that we thought scarcity played a role in compliance situations.

First, something, a product for example, can be described as being in short supply (or a limited edition. This is why sales often say “while supplies last” which leaves the reader with a slight nudge to purchase right now before missing out. Second, scarcity affects compliance when an opportunity is available for a limited time (e.g., “This weekend only.”) While these principles don’t ensure that someone will purchase a product, they do increase the odds of a purchase.

The authors wanted to test another way that scarcity might factor into our decisions. They hypothesized that we naturally rely on a rule of thumb (heuristic) that says one should take advantage of a unique opportunity. Specifically, “the rule says that we should take advantage of opportunities that few others have access to. For example, if I believe I can purchase tickets to a play at a low price that is unavailable to most people, I am more likely to buy the tickets than if I believe many people have access to this same price.”

We’ve all seen examples of this type of marketing already through “friends and family” and “not available to the public” events. But do they work?

The authors certainly think so:

individuals are more likely to comply with a request when they believe the request represents a unique opportunity not available to most people. The effect appears to operate independently of a limited supply effect and is not the result of a perceived need to help the requester. Moreover, the effect is found even when the opportunity is determined purely by chance, suggesting that individuals are not responding to a sense that they have somehow earned the opportunity. Rather, the unique opportunity effect appears to be the result of heuristic processing, i.e., people relying on a rule of thumb that says they should grab an opportunity available to few others.

Source: Burger, J. M. & Caldwell, D.C., When opportunity knocks: The effect of a perceived unique opportunity on compliance. Group Processes and Intergroup Relations

Abstract:

Four studies examined the effect of a perceived unique opportunity on compliance. In all four studies, participants who believed they had an opportunity available to few others were more likely to agree with a request than participants who believed the opportunity was widely available or participants who received no opportunity information. We attribute the effect to a widely held heuristic that one should take advantage of unique opportunities. Study results demonstrated that people respond to a perceived unique opportunity even when supplies are not limited and when the opportunity is the result of pure chance. The results of a mediation analysis supported the interpretation that the perceived uniqueness of the opportunity underlies the effect.