The proposed research explores the psychological mindset that arises in contexts of scarcity. Previous research has documented the greater focus and precision that emerge under scarcity, as well as the accompanying costs that are incurred as those who focus on scarcity neglect things in the periphery. The present studies investigate several additional yet central aspects of this scarcity mindset. We extend earlier work on how scarcity captures attention and encourages tradeoff-thinking, thereby yielding greater consistency in decision-making. Among other things, we explore persistent shifts of attention, and investigate how a focus on tradeoffs can make people highly effective budgeters with respect to the resource that's currently scarce, but much less effective regarding competing and future resources. We probe how resource inequality can exacerbate the attention drawn to scarcity, and we explore whether increased tradeoff thinking, by capturing attention, can actually undermine subjective well-being and the ability to savor real-time experiences. A second line of studies addresses not whether scarcity improves or harms decision-making; instead, it looks at how a scarcity mindset changes the texture of everyday thinking and experience along various qualitative and affective dimensions. It investigates what kinds of thoughts or concepts are most accessible when we inhabit scarcity, how our thinking changes as a result, and how, under scarcity, people end up organizing the world into different categories. It also explores why scarcity-related thoughts might prove more cognitively taxing than the everyday worries that plague individuals who are not laboring under scarcity. The proposed studies range from surveys and laboratory experiments to field studies, and explore the differences between poorer and richer participants both in naturally occurring settings, as well as in controlled experimental settings where participants are randomly assigned to scarcity (limited budgets) versus plenty (larger budgets), before their reasoning and decision-making are assessed. The research provides a new and different perspective on decision-making in contexts of scarcity in general, and of poverty in particular. It focuses on how scarcity mindsets can change the texture of everyday thinking and experience, and derives several novel predictions, both for theory and for practice. It has profound implications for the debate about the causal connections between poverty and behavior, and for how we might interpret various policy failures. Scarcity is an inherent feature of the world, yet the psychology of scarcity only arises in specific circumstances. This has important implications for the study of cognition, decision-making, and well-being, and it can have profound repercussions for how behavioral economics and the social sciences understand contexts of scarcity, and for potential solutions to problems of public policy.

This research provides a new and different perspective on fundamental problems surrounding decision-making behaviors in contexts of scarcity in general, and of poverty in particular. It focuses on how scarcity mindsets can change the texture of everyday thinking and experience, and derives several novel predictions, both for theory and for practice. Previous research explored the greater focus and precision that emerge under scarcity, as well as the accompanying costs that are incurred as those who focus on scarcity neglect things in the periphery. We extend earlier work on how scarcity captures attention and encourages tradeoff-thinking, thereby yielding greater consistency in decision-making and judgment. Among other things, we explore the resulting attentional shifts, and we investigate how the attention devoted to such tradeoffs can make people good budgeters with respect to the resource that is scarce, but less effective budgeters on competing resources. We probe how resource inequality can exacerbate the attention drawn to scarcity, and we explore whether increased tradeoff thinking, by capturing attention, can actually undermine subjective well-being and the ability to savor real-time experiences. We also investigate the kinds of thoughts or concepts are most accessible when we face scarcity, how activated semantic networks change as a result, and how, under scarcity, people end up organizing the world into different categories. We also ask why scarcity-related thoughts might be more cognitively taxing than the everyday worries that plague individuals who are not laboring under scarcity. This research has profound implications for the debate about the causal connections between poverty and behavior, and for how we ought to interpret failure in circumstances of poverty, and of scarcity more generally. Scarcity is an inherent feature of the world around us, yet the psychology of scarcity only arises in specific circumstances. This has important implications for the study of cognition, decision-making, and well-being, among other things, we predict that certain errors and inconsistencies typically observed in situations of abundance will dramatically diminish under scarcity. We also expect the nature of certain affective experiences to differ in scarcity contexts. This can have profound implications for how behavioral economics and the social sciences understand experiences in scarcity contexts, and for ensuing applications to policy challenges.

Agency
National Science Foundation (NSF)
Institute
Division of Social and Economic Sciences (SES)
Application #
1426642
Program Officer
Jonathan W. Leland
Project Start
Project End
Budget Start
2014-12-15
Budget End
2019-11-30
Support Year
Fiscal Year
2014
Total Cost
$323,712
Indirect Cost
Name
Princeton University
Department
Type
DUNS #
City
Princeton
State
NJ
Country
United States
Zip Code
08544