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In the realm of social psychology, for something to be scarce implies that there is a finite quantity of that thing and that we’re aware of this finitude in a way that influences our perception of its value.
In general, this relationship implies that when there is less of something available, it will seem more valuable to us, while an abundance of something would cause us to place a lower value on it.
It’s thought that this perceptual adjustment is triggered by a survival-tied heuristic that helps us prepare for an uncertain future by ensuring we’re equipped for whatever might come next.
Preparation, in this context, might mean making sure we own a screwdriver, even if we don’t have any screws that need tightening at the moment, or reason to believe we’ll be tightening screws at any point in the near-future. The possibility that we may someday need such a tool is enough for us to buy a screwdriver, just in case.
This desire to be prepared can be stoked and amplified by the possibility that a resource could disappear.
Even if we have no screws to tighten right now, if we hear there’s a worldwide screwdriver shortage, we may be more inclined to go buy one based on the conscious or subconscious desire to never lack the ability to tighten a screw should the need someday arise.
This disposition is predicated on a psychological concept called “reactance,” which manifests as an arousal-based impulse to avoid having our options limited.
Even if we weren’t thinking about screwdrivers or screws or construction-related tools of any kind before we heard the news about the screwdriver shortage, becoming aware of this possible limitation to our range of options can trigger something like a fight-or-flight response: a need to maintain the ability to tighten screws.
Our disposition toward loss-aversion seems to play a role in this response, though it may work the other way around—our desire to maintain a full range of behavioral freedoms informing our distaste for losing anything, and thus over-valuing things that we own simply because we own them.
Whatever the origin of this tendency, though, it’s often used against us by those who hope to influence our behaviors.
Only having a limited number of new Playstations or high-end sneakers available at launch can distort the market for these goods, leading to a frantic rush to get one.
These consoles or shoes are not inherently any more valuable than they would have been, were they available in sufficient quantities to serve the targeted market right away. But this sense of finitude can short circuit our rational assessment of the actual, practical utility of the thing we’re thinking of purchasing. It can also inflate our sense of what the product is worth, making the sticker price seem like a deal.
Such limits can also make us to feel like we’re part of a small, exclusive, better group of people, because we were able to purchase a limited-edition watch, or welcomed into the club while a crowd of other, less-special people are forced to wait in line, outside.
That sense of exclusivity is part of what causes us to price old comic books and misprinted stamps above and beyond their actual utility: rarity can amplify the perceived value of a good or experience.
As I mentioned before, these sorts of restrictions can be powerful tools in the hands of those who want to sell us things: and that’s true of the prices set, but also the likelihood of a sale.
Artificial constraints on the time-frame during which a particular product will be available, or available at a particular price, are common in some industries.
Automobile salesmen, for instance, are notorious for their hard-sell tactics, which often include a warning that the price they’re offering is available right now, but as soon as you walk out the door it will increase: a powerful incentive to make a purchase, made especially potent by our latent desire to avoid have our options taken away.
There are moments in which it makes sense to gather and defend scarce resources, but much of the scarcity we encounter on a daily basis, in the modern world, is implemented artificially. And in some cases this scarcity is implied rather than actual—though real or fake, such limitations can still stimulate in us potent, irrational responses.
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