Chapter 6 Scarcity Flashcards
What is the principle of scarcity?
Scarcity refers to the idea that opportunities seem more valuable when they are less available.
Scarcity influences consumer perception, making rare items appear more valuable.
Who is G. K. Chesterton?
G. K. Chesterton is a writer known for the quote, ‘The way to love anything is to realize that it might be lost.’
This quote emphasizes the emotional impact of loss.
What role does a mediator like Sandy play in divorce negotiations?
A mediator facilitates discussions between divorcing parties to reach agreements without courtroom trials.
Sandy uses her understanding of psychology to navigate complex emotional disputes.
What behavioral science concept did the author suggest to Sandy for overcoming negotiation deadlocks?
The author suggested changing the wording from ‘Agree to this proposal’ to ‘We have a deal. All you have to do is agree to this proposal.’
This change emphasizes possession and loss, leveraging loss aversion.
What is loss aversion?
Loss aversion is the concept that people are more motivated by the prospect of losing something of value than by the prospect of gaining it.
This concept is central to Daniel Kahneman’s prospect theory.
What did the Florida State University study reveal about students’ perceptions of cafeteria food?
Students rated cafeteria food as unsatisfactory but changed their opinions significantly after being informed they would lose access to it due to a fire.
This illustrates how loss can alter perceptions of value.
According to the text, why might collectors value flawed items?
Flawed items are sometimes more valued due to their rarity, illustrating how scarcity can enhance perceived worth.
Examples include misprinted stamps and rare coins.
How does availability influence decision-making in social interactions?
People may prioritize interactions with unavailable options over more engaging conversations due to the perceived risk of missing out.
This reflects the psychological pull of scarcity.
What is the ‘limited number’ tactic?
The ‘limited number’ tactic involves informing customers that a product is in short supply to increase demand and urgency.
This tactic has been successfully used by companies like Booking.com.
What impact do losses have compared to gains in decision-making?
Losses have a greater impact on attention, physiological arousal, and decision-making than equivalent gains.
Research shows people are more likely to cheat to avoid a loss than to achieve a gain.
True or False: People are equally motivated by the prospect of gaining something as they are by the prospect of losing something.
False.
Loss aversion indicates that the prospect of loss is more motivating than the prospect of gain.
What evolutionary reason is suggested for the sensitivity to loss?
The sensitivity to loss is thought to be adaptive, as a decrease in resources could be fatal, while an increase is beneficial but less critical.
This perspective is supported by Haselton & Nettle (2006).
What did the woman in the iPhone line trade for her spot?
She traded her $2,800 Louis Vuitton shoulder bag for the spot in line.
This decision was motivated by her fear of missing out on the limited supply of iPhones.
Fill in the blank: The idea of loss aversion is a central feature of _______.
scarcity.
How do messages about potential losses affect health-related behavior?
Messages emphasizing potential losses are more effective in encouraging health screenings than those focusing on potential gains.
This has been observed in campaigns for cancer screenings.
What is the limited-number tactic?
A marketing strategy that creates a perception of scarcity by indicating that only a few items are available.
What effect does the limited-number tactic have on consumers?
It increases the immediate value of the item in the eyes of the consumers.
Give an example of how the limited-number tactic can be used.
A salesperson might say, ‘There aren’t more than five convertibles with this engine left in the state.’
True or False: The scarcity principle only applies to the number of items available.
False
What is an example of a personal experience with the scarcity principle?
A woman traded in characters to a resale shop one at a time to exploit the principle.
What lesson did the author’s father learn about selling items?
He learned to sell items individually to create a perception of scarcity.
What is the relationship between abundance and perceived value?
Presenting an item in abundance reduces its perceived value.
How can a salesperson create urgency in a sales situation?
By stating that an item has just been sold to another customer.
What is an effective sales tactic involving time limits?
The ‘deadline’ tactic that places an official time limit on a customer’s opportunity.
What did the research on e-commerce sites conclude about scarcity?
Scarcity is one of the most effective features for increasing sales.
Fill in the blank: The principle of _______ can be applied to unique features of a product.
scarcity
What is the ‘deadline’ tactic?
A method that creates a sense of urgency by limiting the time available to purchase an item.
What is a common tactic used by high-pressure salespeople?
Claiming they can only sell to the customer at that moment.
What is the ‘boiler-room operation’?
A scheme involving fast-talking salesmen who call potential customers to sell fraudulent investments.
What psychological tactic is used during the sales calls in a boiler-room operation?
Creating urgency to encourage quick purchasing decisions.
What is psychological reactance?
A phenomenon where people desire something more when they perceive it as being less available.
True or False: The scarcity principle is ineffective in directing human actions.
False
What can be marketed honestly to create a sense of scarcity?
A unique feature or a unique combination of features of a product.
What was the author’s realization about his desire to visit the Mormon temple?
His interest was primarily driven by the limited opportunity to see a restricted area.
What is the principle of scarcity in compliance?
The principle of scarcity trades on our weakness for shortcuts, leading us to believe that limited availability indicates higher quality.
What is psychological reactance theory?
Psychological reactance theory explains the human response to the loss of personal control, where limiting free choice increases the desire for the restricted items.
At what age do children first show signs of psychological reactance?
Around the age of two, during the ‘terrible twos’.
What behaviors characterize the ‘terrible twos’?
Contrary behavior, such as resisting outside pressure and asserting independence.
What did the Virginia study on toddlers reveal about their behavior towards toys?
Toddlers preferred toys that were obstructed when a barrier limited access.
Why does psychological reactance emerge in toddlers?
It emerges as they begin to see themselves as individuals with choices, leading to a quest for autonomy.
What is the Romeo and Juliet effect?
The phenomenon where parental interference increases the commitment and love between couples.
How does parental interference affect teenage relationships according to studies?
It leads to greater feelings of love and desire for marriage despite increased relationship problems.
What was the reaction of Kennesaw, Georgia residents to the gun ownership law?
Most local residents did not comply with the law, while many out-of-town visitors purchased guns.
What was the outcome of the Dade County phosphate ordinance?
Residents turned to smuggling and hoarding phosphate detergents, believing them to be better products after the ban.
How does psychological reactance manifest in consumer behavior?
When availability is restricted, individuals often desire the item more and assign it positive qualities.
What is the common response to censorship?
Individuals tend to want the banned information more and become more favorable toward it.
Fill in the blank: Psychological reactance is primarily driven by the desire to retain _______.
freedoms.
True or False: Psychological reactance only occurs during childhood and adolescence.
False.
What behavior was observed in Miami residents after the phosphate ban?
They believed phosphate detergents were more effective and desirable after the restriction.
What age group, besides toddlers, is particularly noted for psychological reactance?
Teenagers.
What is one feature of the Kennesaw gun law that triggered reactance?
It restricted the long-standing freedom not to own a gun.
Fill in the blank: The tendency to want what is banned extends to _______ as well.
information.
What was the primary finding from the UNC study regarding banned speeches?
Students wanted to receive the information and became more favorable toward it after learning it was banned.
What is the general response to banned information?
People tend to want the information more and become more favorable toward it.
What was the outcome of University of North Carolina students learning about a banned speech on coed dorms?
They became more opposed to the idea of coed dorms.
How can clever individuals with unpopular views gain support?
By arranging to have their message restricted and publicizing the censorship.
What might the authors of the US Constitution have intended by promoting free speech?
To minimize the chance that unpopular political notions would gain support through psychological reactance.
What types of materials are often subject to censorship?
Political and sexually explicit materials.
What did the Purdue University study reveal about age restriction in advertisements?
Students who learned of the age restriction wanted to read the book more and believed they would like it more.
What is the paradox of censorship regarding sexual materials?
Censorship may actually increase the desire for those materials.
What is the role of a judge in a jury trial regarding inadmissible evidence?
The judge acts as a censor by instructing jurors to disregard certain evidence.
What effect can a judge’s instruction to disregard evidence have on jurors?
It can lead to psychological reactance, causing jurors to use the evidence more.
What does the scarcity principle suggest about information?
We value information more if we think it is scarce.
What was the outcome of the sales experiment conducted by a student regarding scarce information?
Customers informed of impending scarcity purchased significantly more.
What is the ‘But you are free’ technique?
A tactic that emphasizes the recipient’s freedom to say no, increasing compliance.
What did Stephen Worchel’s cookie experiment demonstrate?
Cookies in short supply were rated more favorably than those in abundant supply.
What was the Coca-Cola Company’s significant marketing blunder in 1985?
The introduction of New Coke, which was met with public outrage.
What was the public’s reaction to the discontinuation of the traditional Coke formula?
A widespread demand for the return of the original Coke formula.
How did the preference for New Coke change when participants were aware of its scarcity?
Participants preferred it more when they knew it was unavailable.
What did the Coca-Cola taste tests reveal about consumer preferences?
Consumers preferred the old Coke when it became unavailable.
What psychological principle explains the increased desire for unavailable items?
The scarcity principle.
How did the cookie study relate to civil conflict?
It demonstrated how perceived scarcity can influence consumer behavior.
What was the basic procedure variation in the cookie experiment?
Participants were first given a jar of ten cookies that was then replaced by a jar of two
This variation aimed to explore the effects of experiencing a drop from abundance to scarcity.
What type of scarcity produces a more positive reaction according to the cookie experiment?
The drop from abundance to scarcity
Participants who experienced this drop valued the cookies more than those who only saw scarcity.
Who is a prominent proponent of the argument that newly experienced scarcity leads to revolutions?
James C. Davies
According to Davies, when are revolutions more likely to occur?
When a period of improving conditions is followed by a sharp reversal
What historical example does Davies use to illustrate his argument about revolutions?
The American Revolution
What was the economic condition of American colonists before the American Revolution?
They had the highest standard of living and the lowest taxes in the Western world.
What event did Davies argue triggered the American Revolution?
The British sought to reduce prosperity by levying taxes.
What significant changes occurred for American Blacks after World War II?
Dramatic political and economic gains
What percentage of income did Black families earn compared to White families in 1940?
A bit more than half
What was the income percentage of Black families compared to White families in 1962?
74 percent
What role did violence play in the perception of progress among Blacks during the civil rights movement?
Violence generated a perception of setbacks in progress.
What lesson do governments learn from the historical pattern of revolution?
It is more dangerous to have given freedoms for a while than never to have given at all.
What policies did Mikhail Gorbachev implement to grant new liberties to Soviet citizens?
Glasnost and perestroika
What happened during the coup against Gorbachev in August 1991?
Soviet citizens protested and erected barricades against the coup plotters.
What does the cookie study reveal about competition for scarce resources?
We want items more when they are scarce, especially when in competition for them.
What is the tactic called when salespeople create urgency by implying competition?
Goosing ’em off the fence
Fill in the blank: The desire to have a contested item is almost _______.
physical
What phenomenon describes the behavior of shoppers during competitive sales?
Feeding frenzy
What do department stores use to generate competitive fury among shoppers?
Loss leaders
What is the psychological effect of experiencing a decline in previously established freedoms?
Increased desire and potential for rebellion
True or False: People react more strongly to the loss of things they never used.
True
What was the outcome of the Procter & Gamble coupon elimination experiment?
It produced a consumer revolt despite no actual loss in savings.
What does the response to the coupon elimination illustrate about consumer behavior?
People view coupons as an inalienable right.
What happens to humans and fish in a competitive situation over scarce resources?
They lose perspective on what they want and begin striking at whatever is being contested.
This reflects the adversarial nature of competition.
What was significant about Barry Diller’s $3.3 million payment for The Poseidon Adventure?
It greatly exceeded the previous highest price for a one-time movie showing, which was $2 million for Patton.
ABC expected to lose $1 million on the showing.
Why did Barry Diller decide that ABC would never again enter an auction situation?
Because of the excessive payment made during the auction for The Poseidon Adventure.
This statement indicated the negative impact of competitive bidding.
What did Robert Wood, president of CBS Television, realize during the bidding war?
He became caught up in the bidding fever and lost rationality, leading him to bid excessively.
He expressed relief after losing the auction.
What lesson did the TV executives learn from the ‘Great Poseidon Auction’?
Extreme caution is advised in situations involving scarcity and rivalry.
The auction format created a competitive atmosphere that led to irrational bidding.
What motivates individuals to express their uniqueness in social situations?
The desire to attract interest from potential partners, especially in romantic contexts.
This motivation also extends to preferences for distinct styles in various domains.
How did the advertisement for the San Francisco Museum of Art influence viewers?
The phrase ‘Stand Out from the Crowd’ significantly increased the intention to visit the museum among viewers exposed to a romantic movie clip.
This shows how context can enhance the appeal of distinctiveness.
What was the reaction to the US Army’s decision to change the standard field headgear to black berets?
Current and former Rangers felt robbed of the exclusivity associated with the black beret.
This change was intended to boost morale but instead sparked criticism.
What solution did General Eric Shinseki implement regarding the black berets?
He allowed Rangers to select a unique color for their berets, buckskin tan, to retain their distinctiveness.
This maintained a sense of exclusivity for the Rangers while boosting morale among other soldiers.
What cognitive challenge arises when faced with scarcity pressures?
Emotional reactions hinder rational thinking and decision-making.
The visceral agitation from competition can cloud judgment.
How can one use rising arousal as a cue in decision-making about scarce items?
By recognizing heightened arousal as a signal to proceed with caution rather than acting impulsively.
This approach helps mitigate the effects of scarcity tactics.
What was discovered about the desirability of scarce items through the chocolate-chip-cookie study?
Scarce cookies were rated as more desirable but not better-tasting than abundant cookies.
This suggests that scarcity enhances perceived value without affecting actual quality.
What should one consider when confronted with scarcity pressures?
Whether the desire for the item is for its social, economic, or psychological benefits of possession or for its utility value.
This distinction is crucial in determining how much one should be willing to pay.
What compliance tactic did Richard use when selling cars?
He scheduled multiple prospective buyers at the same time to create competition for the limited resource.
This tactic heightened interest and urgency among buyers.
What psychological change occurs when a second buyer arrives to view a car?
The presence of the second buyer creates a sense of rivalry and competition, altering the dynamics of the sale.
This can lead to increased pressure on the first buyer to act.
What effect does the presence of multiple buyers have on the first buyer’s decision-making?
It creates pressure and a sense of rivalry, leading to a rushed decision-making process.
What tactic does Richard use when a second buyer arrives?
He asserts the first buyer’s right to primary consideration and asks the second buyer to wait.
How does the first buyer’s emotional state change when a second buyer arrives?
They experience agitation and urgency due to the perceived scarcity of the car.
What happens when a third buyer arrives?
The pressure increases, often leading the first buyer to either agree to the price or leave abruptly.
What fundamental fact do buyers fail to recognize about their purchase decisions?
Their increased desire is driven by competition rather than the actual merits of the car.
What emotional reaction do buyers experience due to Richard’s competitive selling tactics?
They feel a heightened desire to possess the car, overshadowing rational decision-making.
Fill in the blank: The principle of _______ suggests that people assign more value to opportunities that are less available.
scarcity
What are some compliance techniques that utilize the scarcity principle?
- Limited number tactic
- Deadline tactic
What is loss aversion?
The tendency for people to be more motivated by the thought of losing something than by gaining something of equal value.
According to psychological reactance theory, how do individuals respond to the loss of freedoms?
They desire to regain those freedoms and the associated goods or services more than before.
At what ages is psychological reactance most evident?
- The terrible twos
- Teenage years
How does limiting access to information affect individuals’ perceptions?
It increases their desire to receive the information and makes them more favorable towards it.
What happens to the value of items that have recently become scarce?
They are valued more highly than items that have been scarce for a longer time.
What is the emotional quality of scarcity pressures?
They are emotion-arousing, which complicates rational thinking.
Fill in the blank: To counteract scarcity pressures, individuals should first _______ and regain a rational perspective.
calm themselves
What should individuals consider when assessing their desire for a scarce item?
Whether they want it primarily for ownership or for its function.
True or False: Scarcity increases the perceived quality of an item.
True
