Persuasion and Influence

Last Chance! Now or Never!

I was looking at hotels on booking.com the other day going through the numerous alternatives and trying to pick out the best offer I could find. While scrolling down the page my attention was immediately caught by the offer depicted above. Suddenly that one studio stood out and it appeared to be more attractive than the other alternatives displayed by the website. But why?! There are a few things to note in the example above. First off there is the alarming message in the red font stating: "Last chance! We only have 1 left on our site!". There is an unwritten rule telling us that if something is rare it must obviously be special, right?! Another important aspect to note in the example above is the information provided in the left box. It provides information which tells us that are a number of other individuals who are likewise interested in this product and hey no need to worry because the latest booking was 10 minutes ago! The messages are therefore conveying a sense of urgency and panic increasing our urge to consider this specific product over the others. Taken together this provides us with an excellent example illustrating the concept of scarcity.

Based on the commodity theory proposed by Brock (1968), which proposes that "any commodity will be valued to the extent that it is unavailable", Worchel et al. (1975) aimed to test this basic assumption of scarcity. In their study they examined the effects of scarcity on object value and attempted to uncover specific variables which were likely to amplify the effects of scarcity. They specifically looked at i) the effects of simple scarcity vs. relative scarcity, ii) the reasons for diminished supply of the object and iii) the effect of the number of people desiring the object.

The experiment conducted by Worchel et al. involved participants rating the taste of a cookie. Subjects were in a room with one experimenter and one jar of cookies when a second experimenter entered the room. The conditions are outlined below.

Scarce-change demand condition - A jar with 10 cookies is exchanged with a jar of 2 cookies because the other participants had eaten more of the cookies than expected. 

Scarce-change accidental condition - A jar with a jar of 10 cookies exchanged it with a jar of 2 cookies because second experimenter had taken the first experimenters jar by accident.

Scarce-no change condition - A jar with 2 cookies is on the table. Second experimenter comes in and asks if the supply of cookies is enough.

Abundant-change demand condition - A jar of 2 cookies is exchanged with a jar of 10 cookies because the other participants had eaten less cookies than expected.

Abundant-change accidental condition - A jar of 2 cookies is exchanged with a jar of 10 cookies because second experimenter had taken the first experimenters jar by accident. 

Abundant-no change condition - A jar with 10 cookies is on the table. Second experimenter comes in and asks if the supply of cookies is enough.

After the second experimenter had left participation was manipulated as well. In the low-participation condition subjects were told that there weren't many participants due to the high costs of the study while in the high-participation condition subjects were told that there were still many participants to take part in the study.

The table above illustrates the liking and attraction ratings of the cookies given by subjects across conditions. Subjects were asked to indicate whether they would like to eat more of the cookie based on a 9-point scale (1=very much: 9=not at all). In accordance to Commodity theory, cookies in the scarce-no change condiion were liked significantly better than the cookies in the abundant-no change condition. However relative scaricity resulted in even more liking of the cookie as can be seen above (scarcity-demand & scarcity-accident better liked than scarcity-no change). Finally cookies which were scarce due to demand were better liked than those who became scarce due to an accident. Attraction of the good was likewise measured on a 9-point scale (1=extremely attractive: 9=extremely unattractive). From the table above we can see that the same significant results were found for attractiveness ratings of the cookie.

The booking.com example can be explained exactly via these proposed mechanisms. The offers presented by the webpage appear especially attractive to us because they place an emphasis on relative scaricity as a result of high demand i.e. only 1 more room left,19 other people looking at it & the last booking was 10 minutes ago!

Sources:

Brock, C. Implications of commodity theory for value change. In A. G. Greenwalt, T. C. Brock, & T. M. Ostrom (Eds.), Psychological foundations of attitudes. New York: Academic Press, 1968.

Worchel, S., Lee, J., Adewole, A. (1975). Effects on supply and demand on ratings of object value. Journal of Personality and Social Psychology, 32(5), 0906-914.