People are motivated more by the thought of losing something than the thought of gaining something of the same value.
Frame something in terms of loss (e.g. how much money is lost due to poor insulation vs how much they would save with good insulation) and you get a response.
Sales technique: Claim an item is the last one and it’s been sold. Then check “in the back” and say you have one more. Customer is happy to buy it without bargaining. So whenever you’re told it’s gone by a salesperson, be wary: Don’t be surprised by a call the next day saying they found one!
Putting a deadline is another form of scarcity.
The urgency to act quickly is a mental shortcut. The other force at play is that we hate to lose our freedoms, and one of those freedoms is choice.
Terrible two’s: Study of kids in two scenarios:
- With a choice of two toys, on with a minor barrier.
- One of the two toys has a significant barrier.
In the first scenario, no strong preference for a toy. In the second one, there was a strong preference for the toy behind the barrier.
Teenage romances: Much stronger feelings when there are strong parental pressures not to behave this way.
When the sale of something is about to be outlawed, people stock up on it (e.g. detergents with phosphates). But there is a side effect: The population shifts to believing the outlawed product is better even though studies show it is not.
I’ve seen similar claims about Speedqueens, and how there’s a fear they will be outlawed due to their water consumption. Also seen it for incandescent bulbs.
When freedom to choose is lost, we experience an increased desire for it. Hence we assume it is better. We rationalize our desire for it by attributing positive qualities to it.
Same effects when you ban information. They are more likely to believe banned information - even if they have not received it!
So if you want to spread your views, get someone to suppress it! You’ll have an edge!
Dilemma: Judge instructing a jury to disregard whatever they just heard. Study shows the effect of the forbidden information is stronger than without the instruction.
Information scarcity need not be via censorship. Exclusive information is more persuasive.
Beef supplier study: Three scenarios:
- Standard sales pitch
- Supply limited sales pitch
- Supply limited and few know it is limited
The last one was the most successful.
We value things that have recently become scarce more than things that have always been scarce.
Claim: Riots and revolutions are more likely to occur not when there is long term systematic abuse, but when there is a sharp reversal of fortunes or wellbeing (recently lost). Think of the Wall St protests. Or the 1960’s civil rights protests. In the 50’s and on, the probability of violence against a black person increased significantly (lynchings went up, etc).
When it comes to freedoms, it is more dangerous to have given for a while than never to have given at all.
Parental discipline is much worse/harder if inconsistent in application.
When something becomes less scarce due to a higher demand, the overvaluation is greater than if it is due to something more natural. Part of it could be due to social proof, but competition in scarce resources is likely a phenomenon in itself. This is why real estate agents may invent a potential buyer to a fence sitting customer.
Hence, the power of auctions! It is inherently competition for a scarce resource.
How To Say No
The joy is not in experiencing a scarce commodity, but in possessing it. Keep this in mind.
A person had a neat trick to sell a used car. He would schedule potential buyers to view it all at the same time, but would negotiate one at a time keeping others waiting in plain sight. The potential buyer would feel the pressure of the line that had formed behind him. If he didn’t accept the price, someone else might!