Resource scarcity

While the psychology of resource scarcity is a new research area, the universality of resource scarcity has been a foundational assumption in modern economic analysis. Accordingly, limited resources required for satisfying our needs (e.g., labor, capital, and time for production or food for consumption) are always limited, which forces any rational individual to prioritize efficiency concerns (i.e., how to make the best use of resources at hand). This combines with the idea of diminishing marginal utility – another foundational concept in modern economics – to suggest that the economic value of a good, as reflected on its market price, increases with its level of scarcity. Despite its critical role in defining economics as the science of efficient use of scarce resources, however, effects of scarcity on the psychology of decision-making have been ignored until recently. It remains an implicit assumption in modern economic theory that the motivation for efficiency gains is independent of the level of scarcity (Isler 2009). Recent findings on the cognitive aspects of scarcity suggest that this assumption can be misleading (Shah et al. 2015), thereby directly linking the foundations of economic science with evolutionary psychology.