7: Scarcity
People tend to take many things in their lives for granted, and do not recognize the value of something until they have lost it or feel they are at risk of losing it. It's only then that they recognize how much they cherished it. One of the most frequent utterances upon someone's death is that people wish that they had known them better and spent more time with them.
And this gives rise to a powerful weapon of influence: if you can convince a person they might lose something by failing to act, they will take action in order to avoid losing it - even if it is something they did not value very much in the first place.
For a Limited Time
The author's opening anecdote involves a personal experience with a large Mormon temple in Mesa, Arizona. He had never been particularly interested in seeing the inside of the place, until he read a newspaper article that mentioned an open house event during which visitors would be admitted to a "special inner sector" to which no-one except the church's inner circle was ever allowed admittance: not members of the congregation, not potential converts, and especially not nonbelievers.
The article stuck in his mind, and aroused in him enough curiosity to visit, but when a friend called him with an invitation to attend a tour, he declined. He recognizes that he was not curious about the religion or the temple, had no special interest in architecture of houses of worship, and hadn't been interested in seeing it before.
But more significantly, he realized in that moment that he was being lured into a trap. Because the article had emphasized the exclusivity of the opportunity, and stressed that it was for a limited time only, he had been baited with the notion of scarcity. The only reason it took his interest is because he believed that if he passed, he would be missing out on something that he would never be offered again.
The Method of Scarcity
Psychologically, people are prone to seek to maintain the status quo - and this causes them to be more attentive to the risk of losing something than to the opportunity to gain something of equal value. This fear is a powerful motivator.
Fear of loss is often used by commercial companies: the sense that there is a limited-time-only sales event or a special item in limited supply gives people the sense they will miss an opportunity. Stores can quickly sell out of an item if word gets out that it is not going to be manufactured anymore. In healthcare, advice gets better attention if you can cause people to lose fearing their youth, wellness, and ability. He mentions a pamphlet for breast cancer screenings that opened with a horror story about the potential to "lose a breast" to mastectomy if cancer is not detected early - which strikes horror into a female reader.
He mentions that collecting, a hobby with deep psychological roots, is largely based on the attraction to scarcity. If an item was made in a limited number, collectors are more drawn to it and will offer more to have it. Flawed items, such as a blurred stamp or double-struck coin, are among the most prize trophies of a collector. The irony is that these items were rejected by quality inspectors as being "not good enough" - and the exact same flaws make them highly valuable to collectors.
Sometimes, the limitations are natural and inevitable - but in other instances the scarcity is entirely false. Consider a three-day sale at a store: they will still have the same merchandise after the event is over, and would usually still make a profit selling it at the reduced price (EN: The exception is loss leaders, which are sold at a loss to get people into the store on the presumption they will buy other merchandise). Therefore there is no reason you could not have the exact same item at the exact same price before or after the "limited time" event - the sale is an artificial scarcity, and it works extremely well on shoppers who flock to purchase items they would not otherwise want in order to avoid missing the opportunity.
He mentions a further use of this tactic, in which a salesman in an appliance store notices someone inspecting an item, thinking about purchasing it. The salesman will tell them that they have sold the last item moments ago, and that it is no longer available. Typically, this will pique their interest and the salesman will go check "in the back" - and he invariably returns to tell them that he has found one that was in the wrong place, and they very often buy it. There is no way to tell whether they would have purchased it anyway, but there is ample evidence that this tactic gets customers to commit to a purchase that they were not set upon making.
The same tactic is commonly used by telemarketers and door-to-door sellers, as there is the automatic sense that if the mark doesn't purchase immediately during that call or visit they will not have another opportunity. Sometimes, this is stated explicitly, and the author provides an extended example of the brokers who work in "boiler rooms" that push stock to people by convincing them that they must act fast or miss out. Car dealers are infamous for offering a deal that is good "today only" and implying or stating that the customer won't get the same offer later if they pass.
That is a common element of the scarcity scam: the mark is convinced to buy quickly and avoid thinking too much about it, because he is in peril of missing out on something if he invests the time to evaluate whether the item is desired or the price is a good deal.
(EN: It's also a double-action ploy. Particularly for salesmen who are seeking immediate commissions, convincing a prospect that the item is worth having is only half the job - they also have to get them to feel a sense of urgency to commit to the purchase. A common complaint I've heard from sales professionals is investing time - twenty minutes or all afternoon - in convincing a person that they need something, and doing so successfully, but the prospect doesn't place an order and will sometimes buy it from another source. For what it's worth, this is often where the power shifts to the mark, and he can use this fear of losing the commission to exert pressure in negotiating with the salesman, who is desperate to close the deal before missing out.)
Psychological Basis
The scarcity play activates two psychological tendencies. The first is our weakness for shortcuts. We learn from experience that things that are difficult to obtain tends to be more valuable to possess than those that can be had easily, and in most instances this assumption turns out to be correct.
The second, which reaches even deeper in the human psyche, is a fear of loss - in this instance the loss of an option. Freedom and power are both based on the availability of options and when options are eliminated, either by lack of material resources or time, we have the sharp sense that we have lost something valuable - not the thing, but the option to have it.
Cialdini mentions studies buy developmental psychologists who have identified a specific tendency that evidences itself in children at the age of two. Children in their "terrible twos" are highly contrary: they seem to want immediately to do what they have been told not to do, and are not satisfied with anything they are given but instead want something else. Pick them up and they will squirm, put them down and they will clamor to be carried. They most want the things they cannot have - and this is the trigger.
In one study children in this age group were placed in a room with two toys. They showed no particular preference for one or the other. If a clear shield was placed between the child and the toy that was not tall enough to prevent their getting to it, they still didn't seem particularly interested. But if the shield was tall enough to prevent the children from getting to the toy, the children crawled around it to make contact with the toy that initially seemed to be blocked. They invariably went first to the obstructed toy, and showed interest in it in about a third of the time.
The author reckons that this age is when children become self-aware and seek to exercise their newfound powers of locomotion to interact with the world, and they are hard-wired to explore.
He also mentions the teenage years as a period in which children are becoming adults and struggling to assert their personal authority and defy the will of parents and other authority figures by acting out. A "Romeo and Juliet" study in Colorado considered relationships among some couples, and it was observed that a parent's disapproval of a partner was linked in some cases to problems in the relationship, but more often strengthened the pair-bond. When parents were coached to decrease their criticism of partners, romantic feelings actually cooled.
Some products also cater to rebelliousness and defiance. Virginia Slims cigarettes became the leading brand among women by telling they "you've come a long way" and using advertising that modeled or suggested aggressive female behavior, and was highly successful in getting their brand adopted by female smokers and even getting nonsmoking women to take up smoking. Using the product was thus linked to rebellion against traditional female roles.
Also worth mentioning is the way that laws and ordinances backfire. That is, simply banning something makes it more alluring. Consider the example of the Dade County ban on using, or even possession, cleaning products containing phosphates. Sales of phosphate detergents in surrounding counties exploded, and there were instances of smuggling and "soap caravans" and hoarding (one family stockpiled a 20-year supply) among ordinary suburbanites.
All of this behavior plays to the desire for security and control: when told a person can't have something or can't do something, particularly when the reason is vague or withheld, makes it more attractive to them even if they had not been considering it before.
He strays across a number of examples: banning handguns or pornography, forbidding people to use certain words, censoring books and films, teen pregnancy and anti-drug campaigns, and the like - in every case this creates a desire for precisely what authorities are attempting to discourage.
Another psychological hook is that scarcity or difficulty appeals to an innate desire to achieve. Our achievements are things we have done in spite of obstacles. People take little pride in walking up a hill, but great pride in climbing to the summit of Everest because it is difficult and because they believe few people are capable of doing it - this makes them feel distinctive and powerful, better than others who have not.
In that sense, a shopper who purchases an item at a special limited-time price feels superior to others who "foolishly" paid more for the same item. They feel clever, accomplished, and superior. They feel smug about themselves and tell others of their accomplishments in hopes that others will defer to them and grant them social status.
Optimal Conditions
It's generally accepted that scarcity makes things more attractive, but it is even more effective if the scarcity is new and unexpected. The author details an experiment in which people were asked to rate their satisfaction with cookies - and it was found their satisfaction was greater when they were presented a tray of two than a tray of ten, but even greater when they were shown a tray of ten, but eight were removed and they were left with two.
A historical study of economics and political upheaval likewise recognized that revolutions are most common following a "short, sharp reversal in fortunes." People can tolerate strife and poverty for long periods of time if the decline is gradual, but even people who are still materially secure will rebel if there is a quick reduction in their welfare. A single incident may provoke rioting and violence, but a cluster of such instances can precipitate a full-scale revolt and civil war.
A few other examples show that the loss of something that was only recently gained also causes more pronounced dissatisfaction than the loss of something that has been possessed for a long period of time.
(EN: I'm reminded of a recent experiment done with capuchin monkeys, who were rewarded with pieces of cucumber for performing a task. Then, they were rewarded for the task with grapes, which they prefer. Then, they switched back to cucumbers, and the monkeys were visibly upset, refused to perform the task, threw the cucumber pieces away, and threw tantrums.)
Competition is another form of presenting the threat of scarcity and leverages social instincts. If there are ten rewards to be had and twelve people, they are mote motivated to obtain the reward - as the negative motivation of being one of the unfortunate two who will be left out adds to their motivation. A similar tactic is used by real-estate agents and car dealers when they claim that an item that a customer seems weakly interested in has another bidder - at which point they take greater interest to avoid "losing" a scarce resource to another person. The author claims that this tactic "can work devastatingly well."
Likewise, sales events that draw large crowds also do especially well because there is the perception that a person must act quickly to get a deal before supplies run out. The competitive behavior of bargain shoppers can be frightening and even violent, akin to a "feeding frenzy" among animal groups. Auction sales evoke similar feelings of competition, especially among inexperienced bidders who don't know the value of items and will get into a bidding war that has nothing to do with the item and everything to do with winning a contest.
Real-World Examples
Cialdini mentions a student of his who was a beef importer, and after the lecture on scarcity attempted and experiment: the clerks who took inbound orders were instructed to do one of three things. The first group was to do nothing unusual at all (control), the second was to mention that supply of imported beef might be scarce in the upcoming months, and the third was to use the scarcity story and add to it that they may not have certain items in stock because they are selling out. Those who heard of the possible shortage ordered twice as much. Those who heard of the shortage and the current depletion ordered six times as much.
Cialdini mentions his brother Richard, who supported himself through school by using a scarcity trick. In brief, he sold cards: he would find underpriced vehicles offered by private sellers, wash them, and sell them at a decided profit a week later. His trick was to schedule multiple people to come to see the car at the same time, because it gave them a sense of competition for a limited resource. Invariably, the first buyer would show greater interest in the car when the second person showed up, so his brother didn't need to budge much from his asking price. Often, he would buy it - but if that deal fell through the third buyer would show up shortly later, as pressure on the second.
Avoiding the Scarcity Trap
The scarcity trap is fairly easy to detect because the conditions of scarcity must be communicated to you. The problem is reacting in time, because the fear of losing an opportunity is a very primal emotion, and the chemical reaction takes place in the amygdala before the rational part of the brain can be engaged.
(EN: This is an exaggeration, as the emotional reaction takes place three milliseconds before the rational part of the brain reacts - meaning that, as Darwin observed, emotions merely poise us for action but it is our rational mind that determines whether the action is executed. There is an observable pause in an action as the rational faculties ratify the emotional reaction.)
The author's suggestion is simply to delay reaction and consider the situation: determine whether the item in question really is scarce, or if the person who is suggesting that it is scarce or that there is a competing offer might be attempting in influencing your decision. Consider whether having it is necessary at the moment, or whether there are other options that will satisfy your needs. Consider whether you are motivated to buy the item for its benefits, or if you are feeling a sense of panic or competitiveness. This process will engage your rational mind long enough for the burst of emotional hormones to subside so that you can consider the purchase rationally.