Scarcity Frames Value

Economic models of decision making assume that people have a stable way of thinking about value. In contrast, psychology has shown that people's preferences are often malleable and influenced by normatively irrelevant contextual features. Whereas economics derives its predictions from the assum...

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Bibliographic Details
Published in:Psychological science Vol. 26; no. 4; pp. 402 - 412
Main Authors: Shah, Anuj K., Shafir, Eldar, Mullainathan, Sendhil
Format: Journal Article
Language:English
Published: Los Angeles, CA SAGE Publications 01.04.2015
SAGE PUBLICATIONS, INC
Subjects:
Adult
Cognition
Contextual analysis
Contextual effects
Cues
Decision analysis
Decision Making
Economic models
Female
Humans
Male
Models, Economic
Psychology
Scarcity
Trade-off
Value
context effects
open materials
open data
judgment and decision making
scarcity
ISSN:0956-7976, 1467-9280, 1467-9280
Online Access:Get full text
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Summary:Economic models of decision making assume that people have a stable way of thinking about value. In contrast, psychology has shown that people's preferences are often malleable and influenced by normatively irrelevant contextual features. Whereas economics derives its predictions from the assumption that people navigate a world of scarce resources, recent psychological work has shown that people often do not attend to scarcity. In this article, we show that when scarcity does influence cognition, it renders people less susceptible to classic context effects. Under conditions of scarcity, people focus on pressing needs and recognize the trade-offs that must be made against those needs. Those trade-offs frame perception more consistently than irrelevant contextual cues, which exert less influence. The results suggest that scarcity can align certain behaviors more closely with traditional economic predictions.
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ISSN:0956-7976
1467-9280
1467-9280
DOI:10.1177/0956797614563958