Imagine wanting to go on a trip and you begin looking at flights to that destination. For the date you want to fly out, the price is at its cheapest, but look, there are only three seats available! Now you start to worry, should you go with this airline, even go on this date? There are a limited number of seats left and the price will only go up if you wait any longer. What about your friend who you are planning to go with, would they want to take this flight?
This is called the scarcity effect. This limited-time and quantity influence you to want to buy things. According to a study conducted by Michael Lynn and Paulett Bogert, customers’ evaluations and perceptions of a product’s attractiveness and expensiveness are influenced if they think the product is in limited quantity (1996).
In their study, they found that a key factor in why scarcity works as a marketing tactic. The customers believe that the product’s price will only increase if they do not buy it at that moment (Lynn & Bogert, 1996).
It also increases the perception of competition, if there are only a few seats at that price, then clearly it must be a busy flight! Scarcity works because it demands commitment, and the perception that if other people are taking this flight, then maybe this is the cheapest it gets.
Lynn, M., & Bogert, P. (1996). The Effect of Scarcity on Anticipated Price Appreciation. Articles and Chapters. Retrieved from https://scholarship.sha.cornell.edu/articles/182