Your favourite store is having a flash sale: 30% off everything. Awesome, right? But when you click through on a shirt you like in the bestsellers section you learn there are only three left in stock. Do you now feel extra motivated to score that shirt? If you said yes — Congratulations! — you’ve just experienced what psychologists and behavioural economists call Scarcity Effect. We place extra value on things when the supply feels limited. Retailers often take advantage of this form of Loss Aversion by limiting sales and adding time-sensitive deadlines to incentivize us to act now. Scarcity Effect hits us in other ways, too. In one classic study, researchers placed 10 cookies in one jar and two cookies in another and asked people to rate them. Even though the cookies were identical, people ranked the treats in the nearly empty jar higher, more so when they were told the cookies had been in high demand. Did they really taste better? We’ll never know for sure.
Use this knowledge Next time you’re shopping online, look for alerts that say, “Only three left!” or countdown timers to complete a sale. Take a moment to think about whether you’re motivated to get the product because it has great value or if it’s because of the sales tactics.