Understanding the Scarcity Heuristic

Habitual behaviours are programmed into our everyday routines. We’ve become creatures of habit, slaves to the system and products attempt to leverage these behaviours to keep us buying and coming back for more. Let’s take a look at one particular technique, the scarcity heuristic which exploits our illogical assumption that because there is less of something, it has a higher value.

Heuristic - is any approach to problem solving or self-discovery that employs a practical method, not guaranteed to be optimal, perfect, logical, or rational, but instead sufficient for reaching an immediate goal.

In simple terms, the Scarcity Heuristic is a tendency to place a higher value on items that are perceived to be scarce and a lower value on things that are seen to be abundant. The effect has been attributed to the behaviours observed in Stephen Warren, Jerry Lee and Akanbi Adewole’s 1975 Cookie Jar experiment which explored the Effects of supply and demand on ratings of object value.

• In the first experiment, participants were asked to place a value on two jars of cookies. One jar held 10 cookies and another contained just 2. Although the cookies and jars were identical, participants valued the ones in the near-empty jar more highly.
• In the second experiment, participants were given jars with either 2 cookies or 10…