Influence of scarcity on travel decisions and cognitive dissonance

ABSTRACT

Online travel agencies advertise limited availability by indicating room inventories and the number of other travelers. This research investigates the effect of limited availability using supply and demand-based scarcity with price promotion on traveler decisions and cognitive dissonance. Two experimental approaches (between and within subjects) examine the causal effects of scarcity. Demand-based scarcity decreases booking decisions while supply-based scarcity increases booking decisions, especially at a discounted price in a within-subjects design. Scarcity produces cognitive dissonance and intention to undo the decisions. For effective applications, scarcity messages should be transparent, and include non-scarce options for comparison. Multiple scarcity messages minimize undo-intentions.

KEYWORDS:

• Scarcity
• supply-based scarcity
• demand-based scarcity
• booking decision
• tourist decision making
• cognitive dissonance
• dissonance reduction
• experiment
• between-subject
• within-subject

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This research was funded by the Harrah College of Hospitality at University of Nevada, Las Vegas.