However, evidence for this finding comes primarily from work that has examined situations when lacking resources poses a threat to meeting one's immediate needs. Using a combination of lab studies, experiments, and data from a special module of the CFI COVID-19 Survey of Consumers, we show that people's responses to perceived resource scarcity depend critically on the time horizon of their threatened needs. When scarcity threatens needs with shorter time horizons, scarcity increases choices of smaller, sooner outcomes. However, this effect minimizes and sometimes reverses when scarcity threatens needs with longer time horizons. These results cannot be explained by differences in people's general preferences for sooner versus later outcomes and suggest that scarcity does not inherently lead to myopic decision-making. This work helps to reconcile seemingly conflicting findings in the scarcity literature and contributes to the ongoing debate over how and why scarcity affects decision-making.View the Full Working Paper
Scarcity and Intertemporal Choice
WP 22-27 – Nearly everyone feels that their financial resources are inadequate for their needs at some point or another. Existing research largely suggests that this perceived scarcity of resources prevents people from considering the future and leads them to prefer obtaining smaller, sooner amounts of resources rather than larger, later amounts of resources.