Scarcity: Why Having Too Little Means So Much

by Sendhil Mullainathan

One of your biggest clients has informed you that it will be taking its business elsewhere. You convince the account manager to listen to one last pitch. She agrees but says it must take place tomorrow. You cancel all your meetings and put off all your other tasks. You pour all your time into the pitch. One appointment, though, cannot be avoided. Your daughter has her city championship softball game tonight. For a moment you even consider skipping that, but your better side (barely) wins out: surely her pitches feel as important to her as your sales pitch feels to you. On the way to the game, your daughter realizes she forgot her lucky charm. You snap at her before turning around to pick it up. By the time you have regained your composure, it’s too late. She was already nervous for the game and now you’ve made her more nervous. Something fun has become tension filled. At the game, you can’t enjoy yourself. Your mind keeps turning to that presentation. Not that you can work on it now—you just can’t focus on the game. You’re distracted, and when your daughter occasionally catches a glimpse of you, you know she knows it. Lucky for you, her team wins and the jubilation helps cover your mistakes. But certainly your performance that evening would not put you in any parenting Hall of Fame. John has an exam tomorrow. He is putting himself through college. Though his parents saved for all their kids’ education, they did not save enough. They never dreamed that tuition would rise so...