Kahneman and Tversky determined that people put more subjective value on loss than on gain and thus strongly prefer to avoid losses instead of acquiring gains.

Scarcity is largely effective because of a cognitive bias known as loss aversion, first demonstrated in research conducted by Daniel Kahneman and Amos Tversky. As a psychology professor, he and his students conducted numerous research studies to identify and prove the 6 influencing principles discussed in his book. Robert Cialdini, a professor at Arizona State University famous for his 1984 book “ Influence: The Psychology of Persuasion.” Cialdini’s book is a study of the psychology of compliance. The Scarcity Principle is 1 of 6 influencing principles coined by Dr. (Our research on email newsletters confirms that the desire to be better informed than others is a driving motivator to subscribe to newsletters.) Background of the Scarcity Principle This is an example of making information scarce. Limited Information In this example from Urban Outfitters, information about the latest arrivals and promotions is published first via the email newsletter. On the Internet, space restrictions are almost never based on literal space restrictions rather, they are often used to curate a collection of objects, people, content, and so on. Limited Inclusion In this example from Creative Market, the number of sellers is limited, so sellers must request an invitation. Limited Time and Quantity In this example from Groupon, both the time for which this deal is available and the number of items are presented as being scarce. In the case of Black Friday, the mobs of eager customers are most often a good thing for retailers…until the mob turns violent. In real life, Black Friday is a good example of scarcity: a sale that occurs on only one day of the year (the day after Thanksgiving in the United States) and consists of a limited number of products offered at discounted prices. The scarcity principle is a well-documented social-psychology phenomenon that causes people to assign high value to things they perceive as being less available. In this article, we discuss the fourth principle in this list: scarcity. In his book Influence: Science and Practice, Robert Cialdini identifies six principles of influence:

Scarcity principle definition