Scarcity Bias — An underestimated behaviour
Social behavior is a fascinating but bewildering topic which social psychologists closely monitor and study. There are numerous perplexing behaviours. Scarcity bias is one of such interesting behaviours. No matter what we humans always fall prey to the scarcity errors. Marketers and business people smartly exploit this behaviour.
What is scarcity bias?
Well, scarcity bias is a mental heuristic in which we unconsciously assume things that are scarce are valuable and things that are abundant are not. We simply believe that the more difficult it is to acquire an item, the more value that item has. In short, we give more value to something which is rare and give less value to something which is abundant.
Rolf Dobelli explains in his book The Art of Thinking Clearly, “we collect stamps, coins, vintage cars even when they serve no practical purpose. The post office doesn’t accept the old stamps, the banks don’t take old coins, and the vintage cars are no longer allowed on the road. They are all side issues; the attraction is that they are in short supply and cannot be replaced” This makes them valuable to you, thus you fall prey to the scarcity error.
Let me tell you an incident explained by prominent author Rolf Dobelli himself. One day, he was visiting his friend’s house and having a conversation. Her three children were grappled with one another on the floor. To make them peaceful, he presented them a bag full of glass marbles which he was carrying. He thought those little angels would play in peace. But things get worse when the glass marble spilled out on the floor. A heated argument ensued among them. Among the countless marbles there was just one blue in color. All marbles were exactly same size shiny and bright. Since the blue one is scarce, little children gave more value to it.
Effective usage of scarcity bias in marketing and business
Business world use scarcity bias as an effective marketing tool.
Have you ever booked a hotel via booking.com? You might have noticed red highlighted alerts like “Only 3 room left!” , “There are 20 people looking at this hotel”.
Did you notice highlighted alerts like ‘Currently 15 people are looking at this route’, ‘Only 3 seats left at this price’ while booking flight?
Scarcity bias unknowingly makes you grab it as quickly as possible. Advert alerts like ‘While stock last’, ‘Today only ‘are used to exploit your scarcity bias. If you have a product or service which has huge demand, you can use it as a marketing tool. Don’t fake it. It is unethical.
Conclusion
Typical response to a scarcity is a lapse in clear thinking. Assess the products and services solely on the basis of price and benefits. There is no importance if an item is selling fast or so many people are looking on it or it is available only for a limited period of time.
