Scarcity: Psychology Of Having Too Little

Tuesday, March 20, 2018

If you are struggling with time management or trying to get out of poverty, you might want to learn more about scarcity psychology. Experiencing a lack of something, whether money, time or other resources has a huge impact on our lives.

Scarcity can influence our perception of the world and decisions we make. For this reason, it is important to understand the nature of this phenomenon. To start with, there is a great resource to learn about scarcity psychology, which will be very useful for those willing to change their lives and get out of the poverty trap, as well as those interested in behavioral economics. 

“Scarcity: Psychology Of Having Too Little” is a book written by a professor of economics at Harvard University Sendhil Mullainathan and Professor of Psychology and Public Affairs Eldar Shafir. The book helps the reader understand more about inference mechanisms, decision-making processes, and the way scarcity influences our mind and our lives in general. 

Listen to the summary at Blinkist or Listen to the book at Audible.

What is Scarcity?

Learn what is scarcity

As it is known human desires have no limits. We might be able to satisfy our wants, but then new ones will turn up shortly after. However, our resources are limited. That is why such a phenomenon like scarcity exists in the first place. 

In simple terms, scarcity means: not having as much as you feel you need. 

It can refer to some material things, such as money and possessions, or more abstract ones, such as time, education or relationships. If you study more about scarcity psychology, you will find out that driven by the feeling of scarcity people make wrong decisions and become less happy.

Further Read: How Minimalistic Lifestyle Can Lead to Happier Life?

Their whole perception of the world and events in it changes. That is why it is vital to understand how it all works and how to deal with the feeling of scarcity, which seems to be following us everywhere. 

What Happens To Our Mind When It Faces Scarcity?

Financial hardship

To understand scarcity psychology, think about the last time you were hungry. 

All you could think about at that moment was food. You could not focus on anything else, except for food.

This is because at that exact moment when you felt the hungry food was a scarce resource. This example illustrates how scarcity captures our mind, absorbs all our thoughts and does not let us concentrate on anything until we fulfill our need to have the scarce resource. 

Scarcity does not only influence our focus and attention. It also has a huge impact on the way we perceive the events and interpret information. This explains our feeling of time.

Sometimes it feels like time is passing by so slow when we are experiencing some traumatic moments because we feel a lack of certain things at these moments. Or, vice versa, time may seem to fly fast when we are afraid we will not have enough time to meet the deadlines to finish our projects. 

How to Escape the Feeling of Scarcity?

If you get into a scarcity trap, you might feel hopeless to find the way out of this vicious circle.

But don’t worry, there are simple ways to deal with this. What you can do to escape from this trap is to give yourself a slack, a comfortable buffer.

Slacks can be different things – starting from a little place in your travel bag to a short break in your schedule between the meetings. In the first case, you will not need to worry where to put something which you have remembered about at the last moment since you bag is not packed to the brim.

You have a buffer – a little free space to solve this small issue. In the second case, you will not need to get stressed about meeting overrun. These things can be anticipated and can save your time and nerves. 

How to Take Right Decisions and Avoid a Scarcity Trap

Be happy and content with little

Because of scarcity, we tend to make rush decisions, we don’t plan and don’t focus on future outcomes because we are preoccupied with the lack of something we are experiencing in the present. This shortsightedness should be avoided. 

Having learned about scarcity psychology, you will understand how this mechanism works. Therefore, you will develop some ideas on how to avoid scarcity trap and be a successful individual happy with what you already have. Following these steps will help you on the way to stability and personal growth.

  • If you face scarcity, restructure your tasks, change the attitude to them, look at what you have to complete from another perspective
  • Allow for some buffer. Always keep an extra space in your bag, your schedule, your room, and your life
  • Avoid making rush decisions. Develop an effective system of decision making to make sure you will not regret about those in a long run 

And finally, accept that some resources are limited, while our desires are not. However, if you use those resources wisely and have the right attitude to them, you realize that you always have enough, just as much as you need.