Scarcity: Why Having Too Little Means So Much

by Sendhil Mullainathan

Here was an expert who had spent years perfecting her craft, yet one of her best dishes was created under intense pressure, in a couple of hours.

Creative bursts like this build on months and years of prior

experience and hard work. The time pressure focuses the mind, forcing us to condense previous ef...

Amanda Cohen’s experience illustrates another side of scarcity, a side that can easily go undetected: scarcity can make us more effective. 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.

But in one way they are all the same. They all begin unfocused, the discussions abstract or tangential, the conversations meandering and often far off topic. Simple points are made in lengthy ways. Disagreements are aired but without resolution. Time is spent on irrelevant details. But then, halfway through the meeting, things change. There is, as Gersick calls it, a midcourse correction.

The second half of the meeting nearly always produces more tangible progress.

The midcourse correction illustrates a consequence of scarcity capturing the mind. Once the lack of time becomes

apparent, we...

Now imagine the same situation a month later. The chapter is due in a

couple of days, not in several weeks. This time when you sit down to write, you do so with a sense of urgency.

Psychologists have studied the benefits of deadlines in more controlled experiments.

The result? Just as in the thought experiment above, the group with tighter

deadlines was more productive. They were late less often (although they had more deadlines to miss), they found more typos, and they earned more money.

The change in perceived scarcity changed how students managed their time. When they felt they had little time left, they tried to get more out of every day. They spent more time engaging in activities, soaking in the last of their college years. They also reported being happier—presumably enjoying more of what college had to offer.

Despite being valid for a longer period of time, the coupons with no expiration date are less likely to be used. Without the scarcity of time, the coupon does not draw focus and may even be forgotten.

Deadlines are effective precisely because they create scarcity and focus the 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.

Scarcity of any kind, not just time, should yield a focus dividend. We see this anecdotally. 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.

But looked at another way, the poor did better: they were more accurate with their shots. This was not because of some magical improvement in visual acuity. The poor took more time on each shot. (There was no limit on how long they could take.) They aimed more carefully. They had fewer shots, so they were more judicious.

In the real world, the poor and the rich differ in so many ways. Their diverse backgrounds and experiences lead them to have different personalities, abilities, health, education, and preferences. Those who find themselves working at the last minute under deadline may simply be different people.

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.

These data show how scarcity captures attention at many time scales. We saw in the introduction that scarcity captures attention at the level of milliseconds—the time it took the hungry to recognize the word CAKE. We see it at the scale of minutes (aiming blueberries) and of days and

weeks (college seniors getting the most out of their time before graduation).

The pull of scarcity, which begins at milliseconds, cumulates into behaviors that stretch over much longer time scales. Altogether, this illustrates how scarcity captures the mind, both...

They decide on their entry and exit strategies. They calculate the

amount of hose they will need. All this must be done in the brief time it takes to get to the fire. And firefighters are terrific at managing this scarcity. They get to distant fires in minutes. They reap a big focus dividend. But this dividend comes at a cost.

Focusing on one thing means neglecting...

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.

The term tunneling is meant to evoke tunnel vision, the narrowing of the visual field in which objects inside the tunnel come into sharper focus while rendering us blind to everything peripheral, outside the tunnel.

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.

In this scenario, if you were free of the mental influence of scarcity, you still

gym that day was the best choice. When we tunnel, in contrast, we choose differently. The deadline creates its own narrow focus. You wake up with your mind focused on—buzzing with—your most immediate needs. The gym may never even cross your mind, never enter your already full tunnel.

You skip the gym without even con...

You skip the gym whether or not it is the right choice, whether or not a neutral cost-benefit calculation would have led you to the same conclusion.

Tunneling operates by changing what comes to mind. To get a feel for this process, try this simple task: list as many white things as you can. Go ahead and give it a try. To make things easier, we will give you a couple of obvious ones to start you off. Take a minute and see what other white things you

can name.

First two choices given were snow and milk

In experiments, people given these “helpers” name fewer total items, even counting the freebies.

This perverse outcome is a consequence of what psychologists call inhibition. Once the link between “white” and “milk” is activated in your mind, each time you think, “things that are white,” that activated link draws you right back to “milk” (and activates it further).

“Milk” is such a canonically white object that, once activated, it crowds out any others. This is a basic feature of the mind: 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.

Starting off with an important goal led to 30 percent fewer goals being named. Just as “milk” tends to shut out other white objects, activating an important goal shuts off competing goals. 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. Scarcity creates a powerful goal—dealing with pressing needs—that inhibits other goals and considerations.

Inhibition is the reason for both the benefits of scarcity (the focus dividend) and the costs of scarcity. Inhibiting distractions allows you to focus.

The primary goal—to finish writing the chapter—captured our mind. It inhibited all those distractions that create procrastination, like e-mail, a video game, or a light snack. But it also inhibited things we ought to have attended to, such as the gym or an important phone call.

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

And in the lab we can also see the negative consequences of tunneling. If scarcity-induced neglect is insensitive to the weighing of costs and benefits, we ought to see scarcity creating neglect even when it is detrimental to the person’s outcomes.

And we made them poor (few guesses) in one game and rich (many guesses) in the other. So they experienced scarcity in trying to reconstruct one picture but not the other. Their total earnings depended on their performance on both games: they had to maximize total points earned. Think of it as having two projects, one with a deadline tomorrow and the other a week later. If people were to tunnel, then what they gain in one picture would be offset by worse performance on the other.