The Effect of Perceived Scarcity: Experiencing Scarcity Increases Risk Taking

Abstract

Experiments in this research provide evidence that perceived scarcity increases risk-taking propensity and risk-taking behavior in the real world. One laboratory experiment and two field experiments were conducted to explore the effect of perceived scarcity on risk-taking behavior. Scarcity was manipulated by dealing with problems in scenarios of resource scarcity and recalling memories of resource scarcity. In Experiment 1, compared to the control condition, MBA students in the scarcity condition showed greater risk-seeking, a greater likelihood of engaging in risky behaviors, greater risk perception, and greater expected benefits in social, recreational, financial, health/safety, and ethical domains. In Experiment 2, vendors in a local farmer’s market kept money that other people lost more in the scarcity condition than in the control condition where perceived money scarcity was not triggered. In Experiment 3, participants who were triggered by either perceived money scarcity or perceived time scarcity showed similar percentages of cheating in the statistics test. Experiments 1 and 2 suggest that perceived scarcity increases risk-taking propensity and ethical risk-taking behavior in the real world. Experiment 3 suggests that perceived scarcity induced by different types of resources scarcity may have the same impact on risk taking, and it needs to be further examined.

Keywords:

• Risk-taking behavior
• ethical risk taking
• perceived scarcity
• risk perception
• expected benefits

Additional information

Notes on contributors

Shujing Liang

Shujing Liang received her Ph.D. degree in business management from Southwest Jiaotong University, China, in 2020. She is currently a research staff at the School of Management, Guizhou University. Her research interests include scarcity perception, cognitive function, risk taking, and behavioral decision making.

Dajun Ye

Dajun Ye is a lecturer in management at Sichuan College of Architectural Technology and a doctoral candidate in management science and engineering at Southwest Jiaotong University, China. His research interests include three-way decisions, rough set theory, and multiple-attribute group decision-making.

Yuejun Liu

Yuejun Liu is a doctoral candidate in business management at Southwest Jiaotong University, China. His research interests include consumer behavior and organizational behavior.