It's scarcely a problem for the lazy

This paper by Suri, Kohli & Monroe (2007) demonstrates how the ‘scarcity’ compliance tactic may not be as straightforward as it seems. Cialdini and Goldstein (2002) discuss the principle of scarcity, which holds that when something (product/information) appears scarce it becomes more valuable to us. This is because automatic thinking biases lead us to conclude that if something has sold quickly, or that not many people have it, it is of greater worth than something that is in abundance. Many profiteers use scarcity to increase sales. By advertising a product as ‘limited edition’, or ‘only here for two weeks’, schematic thinking is induced which causes consumers to view the item as more valuable and increase how much they are willing to pay for it.

However, Suri, Kohli & Monroe (2007) demonstrate that consumers are differentially affected by scarcity information depending on their motivation for buying a product.

In their study the authors had participants state how much they would be willing to pay for a holiday package (acceptable price ranges determined by similar participants) which was either made to seem scarce (one opportunity for this particular deal) or not (the deal ran every weekend throughout summer). Participants were either in the ‘low motivation’ condition, where they had to imagine they had already been on holiday and now had to judge how much they would have paid, or the ‘high motivation’ condition where they needed to buy (the same) a holiday package for an upcoming holiday. The motivation of participants varied because the desire for a holiday had passed in the just-been-on-holiday condition, so participants were less motivated to get a good holiday deal.

The results were that the participants in the high motivation condition responded as you would expect: they rated the holiday as more valuable, of better quality, were willing to pay more for it, and found paying for it a smaller sacrifice when it was scarce compared to when it was not. For the low motivation group the opposite was found! When the holiday was scarce the participants were willing to pay less for it, rated it as less valuable and of lower quality, and perceived paying for it a higher sacrifice then when it was not scarce. These findings are demonstrated in Figure 1.

This is an interesting finding that is explained by the differential cognitive processes underlying high versus low motivation. Suri, Kohli & Monroe conclude that when you are not highly motivated to buy a product you are more likely to process information about it heuristically. When said product is scarce, however, arousal increases and induces systematic processing of the product. This allows you not to fall into the trap of schematically thinking that a scarce product is a high value one you should pay a lot of money for, and allows a detailed evaluation of its worth. When you are highly motivated to buy a product, on the other hand, you initially engage in systematic thinking about it. However, when it is scarce, the associated emotional arousal actually hinders your systematic thinking and induces heuristic biases which lead you to automatically conclude that a scarce product is a high quality one worth paying more money for.

To summarise; the motivation you are looking at a product with influences how you are affected by scarcity information. When you are not highly motivated to buy the product you are free from emotional pressure to systematically process the worth of the product and not succumb to the persuasive trap of scarcity. 

Figure 1.

REFERENCES

Cialdini, R. B., Goldstein, N. J. (2000). The science and practice of persuasion. The Cornell Hotel and Restaurant Administration Quarterly, 43, 40-50.

Suri, R., Kohli, C., & Monroe, K. B. (2007). The effects of perceived scarcity on consumers’ processing of price information. Journal of the Academy of Marketing Science, 35, 89-100. 

Hannah Thomas