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Scarcity Is Not Always Bad [Excerpt]

In Scarcity: Why Having Too Little Means So Much, a Harvard economist and a Princeton psychologist show that scarcity causes us to focus on the thing that is in short supply. Sometimes this focus has harmful effects; other times it is beneficial. Here, they demonstrate the good side
Scarcity: Why Having Too Little Means So Much



Times Books

Excerpted from Scarcity: Why Having Too Little Means So Much, by Sendhil Mullainathan and Eldar Shafir. Times Books. Copyright © 2013 Sendhil Mullainathan and Eldar Shafir. All rights reserved.

Some of us hate meetings. Connie Gersick, a leading scholar of organizational behavior, has made a living out of studying them. She has conducted numerous detailed qualitative studies to understand how meetings unfold, and how the pattern of work and conversation changes over the course of a meeting. She has studied many kinds of meetings—meetings between students and meetings between managers, meetings intended to weigh options to produce a decision and meetings intended to brainstorm to produce something more tangible like a sales pitch. These meetings could not be more distinct. But in one way they are all the same. They all begin unfocused, the discussions abstract or tangential, the conversations meandering and often far off topic. Simple points are made in lengthy ways. Disagreements are aired but without resolution. Time is spent on irrelevant details.

But then, halfway through the meeting, things change. There is, as Gersick calls it, a midcourse correction. The group realizes that time is running out and becomes serious. As she puts it, “The midpoint of their task was the start of a ‘major jump in progress’ when the [group] became concerned about the deadline and their progress so far. [At this point] they settled into a . . . phase of working together [with] a sudden increase of energy to complete their task.” They hammer out their disagreements, concentrate on the essential details, and leave the rest aside. The second half of the meeting nearly always produces more tangible progress.

The midcourse correction illustrates a consequence of scarcity capturing the mind. Once the lack of time becomes apparent, we focus. This happens even when we are working alone. Picture yourself writing a book. Imagine that the chapter you are working on is due in several weeks. You sit down to write. After a few sentences you remember an email that needs attention. When you open your inbox, you see other emails that require a response. Before you know it, half an hour has passed and you’re still on email. Knowing you need to write, you return to your few meager sentences. And then, while “writing,” you catch your mind wandering: How long have you been contemplating whether to have pizza for lunch, when your last cholesterol check was, and whether you updated your life insurance policy to your new address? How long have you been drifting from thought to vaguely related thought? Luckily it is almost time for lunch and you decide to pack up a bit early. As you finish lunch with the friend you haven’t seen in a while, you linger over coffee—after all, you have a couple of weeks for that chapter. And so the day continues: you manage to get in a little bit of writing, but far less than you had hoped.

Now imagine the same situation a month later. The chapter is due in a couple of days, not in several weeks. This time when you sit down to write, you do so with a sense of urgency. When your colleague’s email comes to mind, you press on rather than get distracted. And best of all, you may be so focused that the email may not even register. Your mind does not wander to lunch, cholesterol checks, or life insurance policies. While at lunch with your friend (assuming you didn’t postpone it), you do not linger for coffee—the chapter and the deadline are right there with you at the restaurant. By day’s end this focus pays off: you manage to write a significant chunk of the chapter.

Psychologists have studied the benefits of deadlines in more controlled experiments. In one study, undergraduates were paid to proofread three essays and were given a long deadline: they had three weeks to complete the task. Their pay depended on how many errors they found and on finishing on time; they had to turn in all the essays by the third week. In a nice twist, the researchers created a second group with more scarcity -- tighter deadlines. They had to turn in one proofread essay every week, for the same three weeks. The result? Just as in the thought experiment above, the group with tighter deadlines was more productive. They were late less often (although they had more deadlines to miss), they found more typos, and they earned more money.

Deadlines do not just increase productivity. Second-semester college seniors, for example, also face a deadline. They have limited time to enjoy the remaining days of college life. A study by the psychologist Jamie Kurtz looked at how seniors managed this deadline. She started the study six weeks from graduation. Six weeks is far enough away that the end of college may not yet have fully registered, yet it is short enough that it can be made to feel quite close. For half the students, Kurtz framed the deadline as imminent (only so many hours left) and for the others she framed it as far off (a portion of the year left). The change in perceived scarcity changed how students managed their time. When they felt they had little time left, they tried to get more out of every day. They spent more time engaging in activities, soaking in the last of their college years. They also reported being happier—presumably enjoying more of what the college had to offer.

This impact of time scarcity has been observed in many disparate fields. In large-scale marketing experiments, some customers are mailed a coupon with an expiration date, while others are mailed a similar coupon that does not expire. Despite being valid for a longer period of time, the coupons with no expiration date are less likely to be used. Without the scarcity of time, the coupon does not draw focus and may even be forgotten. In another domain, organizational researchers find that sales people work hardest in the last weeks (or days) of a sales cycle. In one study we ran, we found that data-entry workers worked harder as the payday got closer.

The British journalist Max Hastings, in his book on Churchill’s “Finest Years,” notes, “An Englishman’s mind works best when it is almost too late.” Everyone who has ever worked on a deadline may feel like an Englishman. Deadlines are effective precisely because they create scarcity and focus the mind. Whether it is the few minutes left in a meeting or a few weeks left in college, the deadline looms large. We put more time into the task. Distractions are less tempting. You do not linger at lunch when the chapter is due soon, you do not waste time on tangents when the meeting is about to end, and you focus on getting the most out of college just before graduating. When time is short, you get more out of it, be it work or pleasure. We call this the focus dividend—the positive outcome of scarcity capturing the mind.

We often associate scarcity with its most dire consequences—the poor mired in debt; the busy perpetually behind on their work. The focus dividend shows how scarcity also has its benefits. But the costs are not far behind. Our largest struggles with scarcity, it turns out, share roots with our greatest benefit: they too follow from scarcity capturing the mind. 

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