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Anuj Shah
Eldar Shafir
Sendhil MullainathanSJDM2012
The Stable Frame of Scarcity
Behavioral magic
Hall(2008)
Having more means…
Having less means…
Scarcity and context
Abundance: Scarcity:
Predictions
Scarcity creates a stable frame for value
This is true for various forms of scarcity
Thaler (1985)
N = 148
Study 1: WTP
Low Income High Income0
1
2
3
4
5
6
7Resort
Grocery
WTP (
$)
Study 2: Valuing money
Slovic et al.(2002)
Study 2: Attractiveness
Low Income High Income0
2
4
6
8
10
12
14No Loss
Loss
Att
ract
iveness
N = 100
Study 3: The broader context
Study 3: Using the ticket
Price Paid Market Price1
2
3
4
5
Low Income
High Income
N = 98
Study 4: Fixed resources
“that’s expensive!” “that’s not so bad.”
Morewedge et al. (2007)
Study 4: Expensiveness
Low Income High Income123456789
1011
Small
Large
Expensi
veness
N = 123
Study 5: Caloric scarcity
Study 5: Fattiness
Dieter Non-dieter1
2
3
4
5
6
7
8
9
10
11Small
Large
Fatt
enin
g
N = 85
Study 6: The feud
Study 6: Expensiveness
Poor Rich123456789
1011
Small
Large
Expensi
veness
N = 73
What we’ve seen
Scarcity leads to more stable valuation
And somewhat less flexible accounting
Perhaps because scarcity creates a salient, stable context
Thanks
Experiment 7
Epley et al. (2006)
Experiment 7
N = 141
Low Income High Income0
10
20
30
40
50
60
70
80
90
100rebate
bonus
% S
ave