Scarcity: Why Having Too Little Means So Much

by Sendhil Mullainathan

Double-booked meetings (committing time you do not have) are a lot like bounced checks (spending money you do not have).

By scarcity, we mean having less than you feel you need.

Scarcity is more than just the displeasure of having very little. It changes how we think. It imposes itself on our minds.

In one study, children were asked to estimate from memory, by adjusting a physical device, the size of regular U.S. coins—from a penny to a half-dollar. The coins “looked” largest to the poorer children, who significantly overestimated the size of the coins.

The capture of attention can alter experience. During brief and highly focused events, such as car accidents and robberies, for example, the increased engagement of attention brings about what researchers call the “subjective expansion of time,” a feeling that such events last longer, precisely because of the greater amount of information that is processed.

scarcity’s capture of attention affects not only what we see or how fast we see it but also how we interpret the world.

Scarcity is not just a physical constraint. It is also a mindset.

When we function under scarcity, we represent, manage, and deal with problems differently.

When scarcity captures the mind, we become more attentive and efficient.

When we think of the busy, or the lonely, we think of a shortage of time, or of friends. But our results suggest that scarcity of all varieties also leads to a shortage of bandwidth.

Scarcity captures our attention, and this provides a narrow benefit: we do a better job of managing pressing needs. But more broadly, it costs us: we neglect other concerns, and we become less effective in the rest of life.

We all have had experiences where we did remarkable things when we had less, when we felt constrained.

In our theory, when scarcity captures the mind, it focuses our attention on using what we have most effectively.

The midcourse correction illustrates a consequence of scarcity capturing the mind. Once the lack of time becomes apparent, we focus. This happens even when we are working alone.

Just as hunger led food to be top of mind for the men in the World War II starvation study, a deadline leads the current task to be top of mind.

When time is short, you get more out of it, be it work or pleasure. We call this the focus dividend—the positive outcome of scarcity capturing the mind.

We are less liberal with the toothpaste as the tube starts to run empty. In a box of expensive chocolates, we savor (and hoard) the last ones. We run around on the last days of a vacation to see every sight. We write more carefully, and to our surprise often better, when we have a tight word limit.

The focus dividend—heightened productivity when facing a deadline or the accuracy advantage of the blueberry poor—comes from our core mechanism: scarcity captures the mind. The word capture here is essential: this happens unavoidably and beyond our control. Scarcity allows us to do something we could not do easily on our own.

It is very hard to fake scarcity. The scarcity dividend happens because scarcity imposes itself on us, capturing our attention against all else.

Just as we cannot effectively tickle ourselves, it is exceedingly difficult to fool ourselves into working harder by faking a deadline. An imaginary deadline will be just that: imagined. It will never capture our mind the way an actual deadline does.

The power of focus is also the power to shut things out. Instead of saying that scarcity “focuses,” we could just as easily say that scarcity causes us to tunnel: to focus single-mindedly on managing the scarcity at hand.

In writing about photography, Susan Sontag famously remarked, “To photograph is to frame, and to frame is to exclude.” By tunneling, we mean the cognitive equivalent of this experience.

Focus is a positive: scarcity focuses us on what seems, at that moment, to matter most. Tunneling is not: scarcity leads us to tunnel and neglect other, possibly more important, things.

The tunnel magnifies the costs—less time for your project now—and minimizes the benefits—those distant long-term health benefits appear much less urgent.

focusing on one thing inhibits competing concepts. Inhibition is what happens when you are angry with someone, and it is harder to remember their good traits: the focus on the annoying traits inhibits positive memories.

Focusing on something that matters to you makes you less able to think about other things you care about. Psychologists call this goal inhibition. Goal inhibition is the mechanism underlying tunneling.

Inhibition is the reason for both the benefits of scarcity (the focus dividend) and the costs of scarcity. Inhibiting distractions allows you to focus. In our earlier example, why were we so productive working under a deadline? Because we were less distracted.

We focus and tunnel, attend and neglect for the same reason: things outside the tunnel get inhibited.

To a farmer who is struggling to find enough money for food and vital expenses this week, the threat of low rainfall or medical expenses next season seems abstract. And it falls clearly outside the tunnel.

Tunneling promotes multitasking because the time saving it allows is within the tunnel whereas the problems it creates often fall outside.

It is always a challenge to decide whether a particular choice was wrong. If by focusing on a deadline you neglect your kids, was that a bad choice? Who is to say? It depends on the consequences of performing poorly at work, the impact of your absence on your children, and even what you want out of life.

we should be cautious about inferring preferences from behavior. We might see the busy person neglect his children and conclude that he does not care as much about his kids as he does about his work. But that may be wrong, much as it would be wrong to conclude that the uninsured farmer does not particularly care about the loss of his crop to the rains.

The busy person may be tunneling. He may value his time with his children greatly, but the project he is rushing to finish pushes all that outside the tunnel.

Looking back at how our time or money was spent during moments of scarcity, we are bound to be disappointed.

because the focus on scarcity is involuntary, and because it captures our attention, it impedes our ability to focus on other things.

Scarcity in one walk of life means we have less attention, less mind, in the rest of life.

Bandwidth measures our computational capacity, our ability to pay attention, to make good decisions, to stick with our plans, and to resist temptations.

Just like an external noise that distracts us from thinking clearly, scarcity generates internal disruption.

One common distinction is between “top-down” processing, where the mind is directed by our conscious choice of what to focus on, and “bottom-up” processing, where attention is captured by one stimulus or another in ways that we find hard to control.

For most subjects, changing the odd-numbered words had no effect. Not so for dieters. Dieters took 30 percent longer to find CLOUD after they had just searched for DONUT. Dieters were not slow overall—they found CLOUD just as quickly as nondieters when it was preceded by PICTURE. The DONUT was the problem. What is happening here is clear. It is a version of what psychologists call proactive interference.

By constantly loading the mind with other processes, it leaves less “mind” for the task at hand.

scarcity directly reduces bandwidth—not a person’s inherent capacity but how much of that capacity is currently available for use.

cognitive capacity, the psychological mechanisms that underlie our ability to solve problems, retain information, engage in logical reasoning, and so on.

executive control, which underlies our ability to manage our cognitive activities, including planning, attention, initiating and inhibiting actions, and controlling impulses.

Cognitive capacity and executive control are multifaceted and rich in nuance. And scarcity affects both.

fluid intelligence, the capacity to think logically, analyze and solve novel problems, independent of background knowledge.

simply raising monetary concerns for the poor erodes cognitive performance even more than being seriously sleep deprived.

We know many ingredients go into the manufacturing of self-control. It depends on how we weigh the future. And we appear to do it inconsistently. Immediate rewards (a marshmallow now) are salient and receive a heavy weight. Rewards in the distant future (two marshmallows later) are less salient and thus receive lower weight.

As Mischel put it, “Once you realize that willpower is just a matter of learning how to control your attention and thoughts, you can really begin to increase it.”

The very state of having less money in the months before harvest had made him perform less intelligently and show less cognitive control.