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The Effect of Perceived Scarcity: Experiencing Scarcity Increases Risk Taking
Shujing Liang1, Dajun Ye2,3, Yuejun Liu2
1Guizhou University.
The Journal of Psychology
|October 13, 2020
Summary
Perceived scarcity significantly boosts risk-taking behavior. This includes increased risk-seeking and engagement in risky actions across various life domains, confirmed by lab and field studies.
Area of Science:
- Behavioral Economics
- Psychology
- Decision Science
Background:
- Resource scarcity is a fundamental human experience.
- Understanding how scarcity influences decision-making is crucial for predicting behavior.
Purpose of the Study:
- To investigate the causal relationship between perceived scarcity and risk-taking propensity.
- To examine the impact of perceived scarcity on real-world risk-taking behaviors across different domains.
Main Methods:
- Conducted one laboratory experiment and two field experiments.
- Manipulated perceived scarcity through resource-scarce scenarios and memory recall.
- Measured risk-seeking, risk-taking behavior, risk perception, and expected benefits.
Main Results:
- Perceived scarcity led to increased risk-seeking and engagement in risky behaviors among MBA students.
- Farmer's market vendors in a scarcity condition were more likely to keep lost money.
- Cheating percentages were similar in participants experiencing perceived money or time scarcity.
Conclusions:
- Perceived scarcity increases risk-taking propensity and ethical risk-taking behavior.
- Different types of resource scarcity may exert similar influences on risk-taking behavior, warranting further investigation.
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