The power of scarcity: we want what we can’t have

During a famine in 1774, Frederik ordered a national cultivation programme. In a response typical of many towns, the people of Kolberg declared: “The things have neither small nor taste, not even the dogs will eat them, so what use are they to us?”

Frederick’s initial response was more a violent “shove” than a nudge – he threatened to cut the noses and ears off any peasant who did not plant potatoes. However, he soon changed tack. In modern parlance we’d say that he used a bit of “psychology”.

Legend has it that instead of issuing further threats, Frederik ordered his soldiers to establish a heavy and visible guard around the local royal potato fields, yet also instructed them to be deliberately lax in protecting them. At the same time, the local peasants noticed their king’s conspicuous admiration of potato flowers as well as the tubers themselves, and sneaked in to steal and plant the “royal crop”. Within a short time, many potatoes were stolen and soon being widely grown and eaten.

Excerpt from: Inside the Nudge Unit: How small changes can make a big difference by David Halpern

How Scarcity of Goods and Exclusivity of Information Significantly Increases Sales

After we talked in my office one day about scarcity and exclusivity of information, he decided to do a study using his sales staff. The company’s customers—buyers for supermarkets or other retail food outlets—were phoned as usual by a salesperson and asked for a purchase in one of three ways. One set of customers heard a standard sales presentation before being asked for their orders. Another set of customers heard the standard sales presentation plus information that the supply of imported beef was likely to be scarce in the upcoming months. A third group received the standard sales presentation and the information about a scarce supply of beef, too; however, they also learned that the scarce-supply news was not generally available information—it had come, they were told, from certain exclusive contacts that the company had. Thus the customers who received this last sales presentation learned that not only was the availability of the product limited, so also was the news concerning it—the scarcity double whammy.

The results of the experiment quickly become apparent when the company salespeople began to urge the owner to buy more beef because there wasn’t enough in the inventory to keep up with all the orders they were receiving. Compared to the customers who got only the standard sales appeal, those who were also told about the future scarcity of beef bought more than twice as much.

Excerpt from: Influence: The Psychology of Persuasion by Robert Cialdini