Items and opportunities become more desirable when they are perceived to be in short supply or occur infrequently.

Few principles move humans to act more effectively than scarcity. When items and opportunities become scarce, so too does their general desirability, and even people who are otherwise disinterested often find themselves motivated to act. The cause likely regards scarcity acting as an indicator of quality in combination with a strong preference for keeping options open whenever possible — in other words, when supply is scarce, demand appears high and the option to participate is at risk. The principle applies generally across the spectrum of human behaviour, from mate attractiveness and selection (often referred to as the Romeo and Juliet Effect) to tactics of negotiation.

Five tactics are commonly employed to apply the principle:

  1. Exclusive InformationSupply is about to be depleted and only a few people have this knowledge (e.g., don’t tell anyone, but a sugar shortage is about to dramatically reduce the supply of cookies).
  2. Limited AccessAccess to supply is limited (e.g., cookies available to first-class passengers only are more desirable than cookies available to all).
  3. Limited TimeSupply is available for a limited time (e.g., cookies available one day a week are more desirable than cookies available every day).
  4. Limited NumberSupply is limited by number (e.g., a plate with two cookies is more desirable than a plate with ten cookies).
  5. SuddennessSupply is suddenly depleted (e.g., eight of ten cookies are suddenly sold, making the remaining two cookies highly desirable).

When competition for scarce resources is visible and direct, the effects can be contagious. This dynamic is commonly observed at auctions, where competing bidders become fixated on winning and consequently bid well over market value for an item. The effect is strongest when the desired object or opportunity is highly unique, and not easily obtained or approximated by other means.

Consider scarcity when designing advertising and promotion initiatives, especially when the objective is to move people to action. Scarce items are accorded higher value than plentiful items, so ensure that pricing and availability are aligned. In retail contexts, do not confuse having inventory with the need to display inventory displays that show a lot of product will sell less quickly than retail displays that show small amounts. Make the effects of demand, especially sudden demand, clearly visible whenever possible to achieve maximum effect.

See also Expectation Effect, Framing, and Veblen Effect.

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In a classic illustration of the power of scarcity, the “Running of the Brides” event at Filene’s Basement has brides-to-be coming from around the world to buy wedding dresses at bargain-basement prices. The event is held once a year, one day only. Friends and family help box out competitors and snatch up dresses as quickly as possible. Brides try candidate dresses on in the aisles until they find that special dress. All of the factors of scarcity are at play: exclusive information, limited access, limited time, limited number, suddenness, and visibility of demand.