Glossary
Psychology of scarcity
What is the psychology of scarcity?
The psychology of scarcity studies how having too little of a resource, such as money or time, and thinking about that shortage, affects attention and decisions. One influential idea is that financial concerns take up mental resources that could otherwise go toward other tasks.
Scarcity, tunneling, and cognitive bandwidth
Shah, Mullainathan, and Shafir proposed that scarcity shifts attention toward some problems while others are neglected. The proposed tunneling effect is concentrated attention on an urgent shortage while other concerns receive less attention. Cognitive bandwidth refers here to the mental resources available for other tasks. These are explanations to test, not evidence that every person under pressure has the same cognitive deficit.
What the research found
Mani and colleagues reported lower cognitive performance among lower-income participants asked to consider financial problems. They also found differences in farmers' performance before and after harvest.
Later work has put the proposed mechanism under closer scrutiny. A 2024 meta-analysis by Szécsi and Szászi found limited support for financial-scarcity reminders having a larger effect on poorer participants. The average estimate was small and uncertain, and the conclusions depended on analytical assumptions.
In a 2025 registered report, scarcity-related words increased thoughts about scarcity but not financial worries. They did not affect sustained attention differently across income groups in the online task.
Scarcity example and limits
Imagine a parent trying to cover rent, utilities, and groceries while also tracking appointments. The example makes the competing demands clear. A missed appointment alone would not establish that scarcity impaired cognition; scheduling conflicts, transport, and other constraints also matter.
Why it matters
Financial hardship is real. Whether a brief reminder produces a particular cognitive effect is a separate question.
Sources and further reading
Related research: Shah, Mullainathan, and Shafir (2012): Some consequences of having too little.