How scarcity captures our mind in why having too little means so much

Share via Email People crouch to collect leftover vegetables in Athens: Most of the academic traffic is concentrated at the busy crossroads between economics and psychology, where a nudge is as good as a blink. This gap was first comprehensively explored in the pioneering work of Daniel Kahneman and the late Amos Tversky, through their Nobel-prize winning analysis of how man and woman, but mainly man is anything but a creature of logic in market places of all kinds. When I interviewed him about his ideas, he observed that the most useful subject for his study of internal biases and wonky reasoning had always been himself.

How scarcity captures our mind in why having too little means so much

Oct 23, Richard rated it it was amazing Recommends it for: For their flawed choices? Are the overweight, struggling with a diet? What about those who complain of being too busy?

What about the lonely? What these have in common is scarcity, something that economists have always studied. But until fairly recently, the idea of studying cognition, or feelings, from an economic perspective would have been absurd, or even heretical. The field of behavioral economics and neuroeconomics has changed that, and took off like Are the poor to blame for their poverty?

The field of behavioral economics and neuroeconomics has changed that, and took off like a rocket when Daniel Kahneman, a psychologist, won the Nobel Prize in Economics. What Sendhil Mullainathan and Eldar Shafir focus on is how the human mind functions poorly when it perceives scarcity — at least partially, it becomes seriously dysfunctional.

Like several other cognitive problems, this was undoubtedly evolutionarily adaptive for our paleolithic ancestors. This is an important book, perhaps even a critical book.

We all have seen discussions of inequality gain attention across the political spectrum, and throughout the world. Not only are we tolerating economic and social policies that worsen the situation of more and more people with each passing year, it seems that being poor creates cognitive problems that make the burden even tougher to overcome.

Scarcity is the curse. The subconscious perception of scarcity changes how we think in ways that are detrimental to escaping whatever is causing scarcity in the first place.

Note that poverty, while it is the form of scarcity that deserves the most attention, is definitely not the only one that is addressed in the book. More on that below.

That scarcity is the cause of the problem and not the result requires a significant conceptual reframing. The authors start out exploring focus under conditions of scarcity. If two people are told to identify words flashing very, very quickly before them on a screen, it turns out that hunger will increase the effectiveness of recognition of words associated with food, without decreasing effectiveness of other words.

This focus is a good thing, right? There are many, many examples where that is precisely what we want. The word they use to describe this is tunneling.

We can even become completely oblivious. Even when voluntarily focusing, this is evident. Those unperceived stimuli have been inhibited from arriving in our awareness. Other objectives we might have otherwise thought important can be eliminated from our consideration by goal inhibition.

A salient example the authors give is the neglect of a firefighter to fasten their seatbelt in the urgent rush from the station to a burning building although the scarcity here is of time, not money. What tunneling reflects is a lack of bandwidth.

The term is annoyingly contemporary, but quite apropos, because like the cyber term it encompasses two related but different resources. Tunneling taxes both our cognitive capacity i.

Another way of perceiving this tunneling is very revealing.

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A common way of prioritizing a to-do list is to rank each item by both urgency and importance. Something that is urgent, but not important, might be ranked higher than something that is important, but not urgent, correct?

This seems counterintuitive, but the book provides plenty of supporting evidence.Jan 01,  · What these have in common is scarcity, something that economists have always studied. But until fairly recently, the idea of studying cognition, or feelings, from an economic perspective would have been absurd, or even heretical/5.

Scarcity: Why Having Too Little Means So Much. By Sendhil Mullainathan and Eldar Shafir. Times Books; pages; $ Allen Lane; £ Buy from heartoftexashop.com, heartoftexashop.com THE authors of this book. Scarcity: Why Having Too Little Means So Much goes on to discuss some of the possible way to mitigate scarcity using defaults and reminders.

Tagged: Behavioral Economics, Books, Economics, Eldar Shafir, Scarcity, Sendhil Mullainathan. Start by marking “Scarcity: Why Having Too Little Means So Much” as Want to Read: A surprising and intriguing examination of how scarcity—and our flawed responses to it—shapes our lives, our society, and our culture trying to expand my mind with non-fiction only to confirm that there's more truth and joy to be had in fiction /5(K).

27 quotes from Scarcity: Why Having Too Little Means So Much: ‘Being poor, for example, reduces a person’s cognitive capacity more than going one full ni. The Guardian - Back to home. Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir – review "Scarcity captures the mind," explain Mullainathan and Shafir.

How scarcity captures our mind in why having too little means so much
Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir