Scarcity Flashcards

2 authors of scarcity

Sendhill and Eldar

Scarcity

Limited quantities of resources to meet unlimited wants

Scarcity means there isn't enough of something for everyone who wants it. It happens when there are limited resources but unlimited wants.

How does scarcity capture the mind

WW2 allies relixed they had a problem, starvation they had enough food but werent sure how to feed the people who had been starving for so long. Now the people who were starved want to be cooks because more food should be a priority. They are all fixated on food

This proves scarcity captures the minds

- when your on a diet (lack of food) you think about it more

The feeling of scarcity is distinct from its physical reality

One day your jam packed at work; aware of scarcity

Another day you have free time you were not aware of scarcity

Same numbers of hours of work

Bandwith

In microeconomics, bandwidth usually refers to the mental or cognitive capacity that people have to make decisions, process information, and plan ahead — not internet speed.

How does bandwidth get consumed

by our pressing needs

Benifits of scarcity

Scarcity can actually make us more productive

Scarcity forces you to pull things together ( Iron chef; the ideas are there but you need a time pressure to bring them out)

When your group is goofing off then when they relize they only have 3 hours to create the project they lock in

Benefits of deadlines: tighter deadlines= more productive

Cons of scarcity

Tunneling:

"Tunneling scarcity" is a concept from behavioral economics and psychology that describes how being in a state of scarcity — whether it's a lack of money, time, social resources, or something else — causes your mind to focus intensely on the immediate shortage at the expense of long-term thinking

Short term thinking, only focusing on the NOW

Focusing now means negletiing other things

Fireman with no seatbelt

Tunneling changes what comes to mind

Milk experiment

Inhibition: focusing on something that matters to you makes you less able to think about other things you care about ( tunneling)

Tunneling tax: when we focus on one thing we are less likely to tend to our other stuff

We miss things when we tunnel

Farmer who is getting by the threat of a thunderstorm or heavy rainfall is out of the tunnel he is just focused on getting by

how does scarcity capture our attention

Dad who has a tight deadline and he goes to his daughters softball game and he cant focus

Scarcity taxes our bandwidth

ex) Imagine you have only $20 left for the week. Every decision—what to eat, whether you can take the bus, if you can afford laundry—requires careful mental math. That constant calculation eats up your "mental bandwidth," leaving you with less focus for work, school, or even remembering to pay a bill on time.

Scarcity prompts internal distractions

Struggling with mortgage, you sit down and do your work and your mind is wandering about if you should sell your car

Scarcity reduces bandwidth

Tight deadline and you have to go to a meeting unrelated to what your deadline is about. How much will you absorb the info or pay attention to

scarcity reduces

fluid intelligence

Low income participants have a greater incentive to do better, because there is more on the line for them

Poverty itself taxes the mind

The poor people have less mental capacity because its consumed by scarcity

Diets dont work because its too taxing

Both a large and a small suitcase impose limits; no matter the size of the suitcase you cant fit everything

Scarcity keeps us focused because it only allows us to pack the important things

Trade offs

Alternatives that must be given up when one is chosen rather than another

Buying a tv poor ask themselves what they have to do give up

Slack

the part of the budget that is left untapped because of why we pack

both benifical and unusful

Poor ends up with less slack then rich

Poor are just getting by, not a lot of wiggle room

Bees create such a precise structures and the wasps such messy ones, scarcity

Bees wax is a material thet is scarce not lot its expensive

slack gives us room to fail

effect of scarcity

When the price goes up the savings loook smaller

However people in trenton would do anything to save money

Being frugal does not capture the experience of scarcity

The poor are albel to make better sense of what to pay ( beer expirment)

Tunneling

Tunneling is when you're so focused on one urgent problem that you ignore other important things.

tunneling and scarcity

We barrow because we tunnel.

We are so focused on getting by

Tunneling therefore leads to borrowing and the scarcity trap begins

Borrowing is a consequence of tunneling

Scarcity family feud experiment

The poor focused because they had little time so they tunneled but they ended up borrowing more than the rich to help themselves in the now but consequences later

The rich were less effective

scarcity trap

SCARCITY LEADS US TO BARROW WHICH PUSHES US DEEPER IN SCARCITY

A scarcity trap is when not having enough of something—like money, time, or resources—makes it even harder to escape that situation.

Scarcity trap vendor expirment

Gave vendors cash they needed and gave the other half a way out of the scarcity trap by buying out all of their debt

Over night they converted borrowers to potential savers

The vendors were stuck in the debt trap because they do not think enough about the future

However they soon fell back into the cycle again because they do not have enough slack in her budget

juggaling

The constant move from one pressing tast to the next, juggling is the consequence of tunneling

When we tunnel we solve problems temperoralily have to come back to them later

Juggling makes the problem more complex

Move from one pressing need to the next

you need slack in case of shocks

diffrent types of scarcity but with poverty you have no choise, dieter can take a break from their diet poverty cant

The poor fall short

Not weeding although it helps the plants

Not good parents because they fail to engage with their children

More planes ( busier day, poor) causes bad parenting

cockpit error

The cockpit made it too easy to make a mistake they needed to redesign the cockpit just like they needed to redesign the lives of the poor

In the lives of the poor we need to design programs to be more fault tolerant

People miss classes

Dont show up

Dont pay attention

Primary welfare program

System made it too easy for people not to work so they created the primary welfare program which the person could be in the program for only 5 years

Bandwidth can be built

High level daycare for your child

Was the mom able to work less hours

Was she less trardy

Does memory improve

These are the ways bandwidth can be built

If we can help people with their financial burdens bandwidth can be built

scarcity in a hospital

More surgeries than operating rooms

Solution always leave one room open to accommodate emergencies

The lack of rooms the hospital had expirences was really a lack of slack in order to work well

SLACK IS USEFULL HERE

Mars orbiters

People working long hours were making mistakes

They were running short on time and tunneled and made mistakes

Firefighting trap

Your busy fighting urgent problems and important but not urgent tasks are neglected

The other problems (seatbelt) are neglected

PROLOUNGED SCARCITY BANDWITH TAXES START TO ACCUMULATE

Scarcity in everyday life

Staying on schedule can be hard

Guy never runs late

His assistance announces when he has 5 minutes left of the meeting and then at the end of the meeting the assistant shows up again

Prevents the scarcity trap

The assistant stands in the way preventing (pyscially) scarcity from doing its harm

The assiatnt forcefully brings up the next meeting

Girl goes to the gym

Signs upp for a trainor that reminds her of getting back into the tunnel

Impulses

Impulses rather than reminders are also easy to bring to the tunnel; place candy bars at the checkout counter

Neglect

We neglect things

To make things easier for us we can use automatic deduction which will allow us to save with full neglect

Allows us to not have to worry about tunnelimg

Vigilance

Scarcity requires vigilance