Scarcity (social psychology)

Scarcity, in the area of social psychology, works much like scarcity in the area of economics. Scarcity is basically how people handle satisfying themselves regarding unlimited wants and needs with resources that are limited.^[1] Humans place a higher value on an object that is scarce, and a lower value on those that are in abundance. For example diamonds are more valuable than rocks because diamonds are not as abundant.^[2] These perceptions of scarcity can lead to irregular consumer behavior, such as systemic errors or cognitive bias.^[3][4]

There are two social psychology principles that work with scarcity that increase its powerful force. One is social proof. This is a contributing factor to the effectiveness of scarcity because if a product is sold out, or inventory is extremely low, humans interpret that to mean the product must be good since everyone else appears to be buying it. The second contributing principle to scarcity is commitment. If someone has already committed themselves to something, and then finds out they cannot have it, it makes the person want the item more.

Although people usually think of scarcity in a physical manner, it is important to note that the 'product' in short supply can also be abstract ideas such as time or energy.