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The scarcity principle can make us value things more highly from "summary" of Predictably Rational? by Richard B. McKenzie
The scarcity principle, a concept deeply ingrained in human nature, plays a significant role in how we perceive the value of things. When something is scarce or limited in availability, we tend to place a higher value on it. This principle is based on the simple fact that scarcity creates a sense of urgency and importance in our minds. In a world where abundance is the norm, scarcity stands out as a rare and coveted quality. This makes scarce items more desirable and valuable to us. We are willing to pay more for something that is scarce because we believe that its limited availability makes it worth more. Psychologically, scarcity triggers a fear of missing out, or FOMO, in us. We worry that if we don't act quickly to secure the scarce item, we will lose out on a valuable opportunity. This fear drives us to assign a higher value to the scarce item, even if its actual worth may be questionable. Advertisers and marketers understand the power of scarcity in influencing our perceptions and behaviors. By creating artificial scarcity through limited-time offers or exclusive deals, they are able to manipulate our sense of value and drive up demand for their products. This is why sales and promotions often emphasize the limited availability of certain items.- The scarcity principle can lead us to overvalue things that are scarce, simply because they are rare or hard to obtain. This can have a significant impact on our decision-making processes and how we allocate our resources. Whether it's a limited edition collectible or a time-sensitive discount, scarcity has a way of making us value things more highly than we otherwise would.
