Motivation and emotion/Book/2025/Scarcity mindset and decision-making

Scarcity mindset and decision-making:
How does scarcity mindset impact cognitive flexibility, motivational processes, and decision-making quality?

Overview

Figure 1. A COVID-19 toilet paper collection. Why don't you just throw it all away? Throwing everything out may be the first thing that comes to mind when exposed to the mountains of stuff in the house of a hoarder, yet it is not that simple. Just as COVID-19 exposed many people in the world to the idea of hoarding resources that were perceived to be scarce and difficult to obtain, such as toilet paper (see Figure 1). Scarcity also drives the behaviour of compulsive hoarders. However, they are often not motivated by toilet paper scarcity, but rather the perceived scarcity of emotional and social connections. Regardless of the resource, scarcity mindset can be a powerful motivator of behaviour.

Mindset is a set of attitudes which influence how a person views and interacts with the world. Scarcity mindset is a mental framework that narrows the perspective of an individual, by focusing their attention on resources that are perceived to be limited. This attentional focus reduces the individuals available cognitive capacity, which impairs decision making efficiency (Civai et al., 2024). Experiences of resource scarcity, including poverty, are linked to the development of a scarcity mindset (Bruijn & Antonides, 2021). Resource scarcity and reduced cognitive capacity may further disadvantage a person in their pursuit of their life goals. Additionally, scarcity mindset has been linked to maladaptive behaviours, including hoarding (Goldsmith et al., 2020). Therefore, research has sought to understand the mechanisms of scarcity mindset and how the effects of scarcity mindset can be reduced.

Focus questions What is a scarcity mindset? Why do people develop a scarcity mindset? How does scarcity mindset influence decision-making? How can the effects of a scarcity mindset be reduced?

What is scarcity mindset?

Figure 2. Scarcity mindset involves the perception of limited resources.

A scarcity mindset is a mental framework that influences a person's perception of the world. It consists of attitudes and beliefs that a person does not have access to the resources they desire or need (Liang et al., 2020). This can include money, time, physical objects and social connections (Mitsui, 2022). In other words, it leads people to focus on the things that they don't have, which limits their mental capacity to focus on other important aspect of their life (see Figure 2). Scarcity mindset is used in advertising campaigns to motivate people to purchase products (Goldsmith et al., 2020). This is done by increasing the perception of scarcity to motivate panic buying due to limited supply, which can lead people to stockpiling products (Goldsmith et al., 2020).

In contrast, an abundance mindset focuses on the abundance of resources and opportunities in the world (Larkin, 2023), as shown in Table 1. This mindset is similar to the concept of open-mindedness, as abundance mindset is not attentionally fixed on a lack of resources, which allows for broader cognitions (Huijsmans et al., 2019). As demonstrated in a study by Huijsmans et al. (2019), individuals primed with a scarcity mindset demonstrated higher levels of concern for a products value when deciding how much to pay, this concern was not present in those primed with an abundance mindset. This shows that scarcity mindset and abundance mindset influence behavioural motivation in opposing ways, as scarcity mindset limits and restricts decision-making processes.

Table 1.

A Comparison of Scarcity Mindset and Abundance Mindset (based on Larkin, 2023)

	Scarcity mindset	Abundance mindset
Core belief	Resources are limited and there is never enough	The world is full of possibilities and resources are plentiful
Focus	Limitations and restrictions	Possibilities and oppportunities
General mindset	Closed minded	Open minded

Quiz 1 Scarcity mindset increases cognitive capacity: True False 2 Scarcity mindset is used to increase people's motivation to buy a product: True False

How does a scarcity mindset develop?

Experiences of prolonged resource scarcity are associated with the development of a scarcity mindset (Sanchez et al., 2023). This can include scarcity of financial resources, physical products and social connection. A study by Mani et al. (2013) found that experiencing poverty decreases cognitive capacity as "poverty-related concerns consume mental resources, leaving less for other tasks" (p. 976). These limitations of attentional focus are also associated with poor financial decision-making (Bruijn & Antonides, 2021). However, the strength of these findings are limited due to accuracy deficits (Bruijn & Antonides, 2021). This suggests that more research is needed to understand the connection between scarcity mindset and poor financial decisions.

Figure 3. Stockpile of toilet paper.

However, scarcity mindset is associated with decisions related to product scarcity. A study by Mitsui (2022) found that "experiencing scarcity was associated with pessimism and maladaptive forms of coping" (p. 10). The effects of this were demonstrated in the panic buying of the COVID-19 pandemic (see Figure 3). Research by Sanchez et al. (2023) also found that social disconnection in early life is associated with the development of a scarcity mindset and hoarding disorder. This suggests that social support mediates the effects of scarcity and the development of a scarcity mindset. It can be seen that experiences of perceived scarcity increase the likelihood of developing a scarcity mindset.

Additionally, research by Tripathi et al. (2022) found generational differences in the prevalence of scarcity mindset. Their research suggests that economic experiences influence scarcity mindset, as different generations experience a different type of economy and different economic changes. They also found that technology and social media influence generational perceptions of scarcity, which was demonstrated in the association between 'non-attachment' beliefs' and 'belief-in-a-just-world', with a decreased prevalence of scarcity mindset. This suggests that cognitive and affective factors influence the prevalence of scarcity mindset. Additionally, their findings showed increased levels of scarcity mindset in males, compared to females. This suggests that gender roles influence the development of scarcity mindset. Although the genralisability of these results are limited due to the Indian sample, the research by Tripathi et al. (2022) shows that there are many factors that influence the development of scarcity mindset including generation and gender norms.

How does scarcity mindset impact decision-making?

Figure 4. Decision making is a complex cognitive task.

Decision-making is a cognitive process where a person selects something from a range of options. This process occurs for many types of decisions (e.g. what to eat, what career to pursue) and can be influenced by many factors (e.g. accessible information, past experiences) (see Figure 4). The mindset theory of action phases (MAPS) (Gollwitzer,1990), was constructed to be a simple way to understand the process of decision-making. This theory presents four phases in the decision making process, which are:

1. Predecisional phase: before a person decides to complete an action
2. Preactional phase: a person has made the decision to complete an action, but not taken any steps towards the action
3. Actional phase: a person completes the action that they decided to complete
4. Postactional phase: evaluation of action completion

Scarcity mindset influences each of these phases through alterations in cognitive flexibility, motivational processes and decision-making quality. These factors are outlined below.

Cognitive flexibility

Cognitive flexibility involves the ability of person to switch between different tasks and topics of thought (Wang et al., 2024). Scarcity mindset limits cognitive flexibility, as it reduces cognitive capacity (Mani et al., 2013). This restricts the cognitive resources that a person has available. Research by Wang et al. (2024) showed that people with a scarcity mindset had slower response times, weakened cognitive flexibility and limited interference suppression when completing psychological tests. This suggests that scarcity mindset reduces a persons cognitive control, which limits their intentional focus and decision making. Neurological research by Huang et al. (2023) investigated the physiological processes of these effects. They found that "perceived scarcity can lead to changes in the neural activity of the brain regions related to executive functioning, resulting in a temporary decrease in cognitive flexibility" (p. 1). This reduces a persons adaptability and learning efficiency (Huang et al., 2023), which limits their ability to integrate new information into their existing attitudes and beliefs.

Figure 5. Cognitively fixed on scarcity beliefs.

The reduced cognitive flexibility and attentional focus on resource scarcity makes it difficult for a person to move through the phases of the decision making process. This is due to resistance to change, and attentional fixation on existing beliefs of resource scarcity. As shown in Figure 5, a person with a scarcity mindset is cognitively fixed on their beliefs of scarcity, therefore restricting any additional information. However, a person with a scarcity mindset can easily move through the phases of decision making, if the decision that they are trying to make align closely with their scarcity beliefs. That is the behaviour is motivated by their scarcity mindset (Gollwitzer, 1990) Although these decisions may not be maladaptive (Goldsmith et al., 2020), they serve to reinforce a persons scarcity mindset.

Motivational processes

Motivation is a state that drives behaviour, therefore motivational processes are the factors that influence progression towards this state. Scarcity mindset restricts the origins of motivation and motivational processes. Research by Zhang et al. (2025) found that scarcity mindset was associated with weakened proactive control, when completing the computerised cognitive response task known as AX-CPT. This suggests that scarcity mindset decreases motivation. When investigating the effects of scarcity mindset on envy, Ren et al. (2023) found that "individuals with a scarcity mindset experienced more envy and generated more malicious motivation and less benign motivation to improve themselves after upward social comparison" (p. 3612). This suggests that scarcity mindset alters the affective components of motivation. Additionally, the motivations that drive actions are seen to be different across generations and genders (Tripathi et al., 2022). This suggests that societal norms can influence motivational processes and are important to consider when creating intervention programs for maladaptive behaviour. Overall, the research indicates that scarcity mindset negatively effects motivational processes.

Throughout the action phases scarcity mindset can result in diminished motivation. As weakened proactive control makes it more difficult for a person to translate their wish, to goal intention and action intention (Gollwitzer, 1990). The influence of emotions increases the complex process of shifting between the phases of action. Societal norms, which discourage an action also reduces the likelihood of a person being motivated enough to translate their wish to action (Gollwitzer, 1990). Therefore, scarcity mindset negatively effects motivational processes by restricting progression through the phases of action.

Decision-making quality

Decision-making quality refers to the quality of a decision based on the possible options available at the time of the decision. There are a variety of factors that can influence the definition of a quality decision, therefore in regards to scarcity mindset a quality decision is an adaptive decision, rather than a maladaptive decision. Research by Mitsui (2022) found that scarcity mindset increases maladaptive coping, including pessimism and self-blame. Other studies have also found that perceived scarcity increases the likelihood of participating in risk-taking behaviour (Liang et al., 2020) and can decrease prosocial behaviour (Civai at al. 2024). These findings suggest that scarcity mindset impairs decision-making quality. An explanation for this is that prolonged scarcity makes it difficult to imagine a better future and leads to maladaptive coping mechanisms in order to deal with the stress of experiencing scarcity (Sanchez et al., 2023). All of these factors show that scarcity mindset reduces decision-making quality.

This reduced decision-making quality does not directly influence a person's progression through the action phases. However, it does influence the evaluation of the action in the post actional phase. As a person compares the actual value of their behaviour to the expected value (Gollwitzer, 1990). Dissonance between these values may further diminish a persons motivation.

Figure 6. Scarcity mindset can develop due perceived lack of social connections. Meet Stacey As a child Stacey always felt distant from her parents, as her mother worked long hours as a nurse and her father locked himself in his art studio for many hours at a time. At school Stacey struggled to make friends, as she felt that everyone always liked the other kids more than her (see Figure 6). Her love for books began in her early years of life, she always loved getting to know new characters. However, as Stacey has gotten older her book collection has grown to fills entire rooms of her apartment. Stacey's landlord recently sent her a formal notice, asking her to reduce the clutter due to safety concerns. The points below describe how the presence of a scarcity mindset may influence Stacey's progress through the phases of action. Predecisional phase: "I know my landlord has given me my final notice, but I just don't know how I am going to let go of my books" - reduced cognitive flexibility restricting a change in decision and the continuation maladaptive coping. Preactional phase: "I really don't want to let go of my books, but maybe I could just keep my favourite books" - fear of loosing apartment influences the possibility of changing decision Actional phase: "I am going to donate some books" - fear perpetuates into action. Postactinoal phase: "I have gotten rid of some books, but my landlord is still unhappy. I might loose my apartment" - emotional connection to the books, cognitive inflexibility and maladaptive coping, mean that the expected value of the behaviour was not obtained.

How can the effects of scarcity mindset be reduced?

Scarcity mindset can be reduced by understanding how it develops and how it associated with motivation. Sarcity mindset develops through experiencing a perceived scarcity of resources. This mindset diminishes cognitive flexibility, motivational process and decision making quality. Research has shown that a scarcity mindset can be reduced by promoting an abundance mindset (Tripathi et al., 2022) and improving individuals sense of control (Ren et al., 2023). For example hoarding disorder demonstrates a powerful relationship between scarcity mindset and lack of social connections (Sanchez et al., 2023). Therefore building social and emotional connections can reduce the effects of scarcity mindset (Sanchez et al., 2023). This shows that it is important to understand what has caused a person to develop a scarcity mindset, so that interventions can be more effective.

Quiz How could Stacey's scarcity mindset be reduced? Throwing all her books out so that she has a clear space and can think clearly Connecting her to a book club

Conclusion

Scarcity mindset is a mental framework that focuses a persons attention on perceived resource scarcity. This mindset reduces decision-making efficiency as it diminishes cognitive flexibility, motivational processes and decision-making quality. Through understanding the experiences of perceived scarcity that influenced it development, scarcity mindset can be reduced by improving social connections, increasing an individuals sense of control, and promoting an abundance mindset. Understanding scarcity mindset helps to build awareness of it effects and how the negative effects can be reduced.

See also

• Consumer panic buying and motivation (Book chapter, 2021)
• Hoarding and motivation (Book chapter, 2014)
• Mindset (Wikipedia)
• Mindsets and motivation (Book chapter, 2016)

References

Bruijn, E.J., & Antonides, G. (2021). Poverty and economic decision making: a review of scarcity theory. Theory and Decision, 92(1), 5–37. https://doi.org/10.1007/s11238-021-09802-7

Civai, C., Elbaek, C. T., & Capraro, V. (2024). Why scarcity can both increase and decrease prosocial behaviour: A review and theoretical framework for the complex relationship between scarcity and prosociality. Current Opinion in Psychology, 60(1), 101931–101931. https://doi.org/10.1016/j.copsyc.2024.101931

Goldsmith, K., Griskevicius, V., & Hamilton, R. (2020). Scarcity and Consumer Decision Making: Is Scarcity a Mindset, a Threat, a Reference Point, or a Journey? Journal of the Association for Consumer Research, 5(4), 358–364. https://doi.org/10.1086/710531

Gollwitzer, P. M. (1990). Action phases and mind-sets. In E. T. Higgins & R. M. Sorrentino (Eds.), Handbook of motivation and cognition: Foundations of social behavior (pp. 53–92). The Guilford Press.

Huang, L., Li, X., Xu, F., & Li, F. (2023). Consequences of scarcity: the impact of perceived scarcity on executive functioning and its neural basis. Frontiers in Neuroscience, 17(1). https://doi.org/10.3389/fnins.2023.1158544

Larkin, T. J. (2023). Cultivating a Mindset of Abundance. The Journal of Continuing Education in Nursing, 54(8), 344–346. https://doi.org/10.3928/00220124-20230711-03

Liang, S., Ye, D., & Liu, Y. (2021). The effect of perceived scarcity: Experiencing scarcity increases risk taking. The Journal of Psychology, 155(1), 59–89. https://doi.org/10.1080/00223980.2020.1822770

Mani, A., Mullainathan, S., Shafir, E., & Zhao, J. (2013). Poverty Impedes Cognitive Function. Science, 341(6149), 976–980. https://doi.org/10.1126/science.1238041

Mitsui, K. (2022). The Relationship Between Coping Mechanisms and the Scarcity Mindset. Undergraduate Research, 2(2), 10–27. https://kb.gcsu.edu/undergraduateresearch/vol2/iss2/21

Ren, M., Zou, S., Zhu, S., Shi, M., Li, W., & Ding, D. (2023). The effects of scarcity mindset on envy: the mediating role of the sense of control. Current Psychology, 43(8), 7612–7627. https://doi.org/10.1007/s12144-023-04872-y

Sanchez, C., Linkovski, O., van Roessel, P., Steinberg, N. M., McCarthy, E., Muñoz Rodríguez, P. A., Avanesyan, T., Mukunda, P., Frost, R. O., & Rodriguez, C. I. (2023). Early life stress in adults with hoarding disorder: A mixed methods study. Journal of Obsessive-Compulsive and Related Disorders, 37(1), 2211–3649. https://doi.org/10.1016/j.jocrd.2023.100785

Tripathi, R. C., Pande, N., Tripathi, V. N., Shankar, S., Pande, A., & Bahadur, R. (2022). Scarcity Mindsets and Generational Differences in India: The Role of Cognitive and Affective Factors. Psychology and Developing Societies, 34(1), 45–78. https://doi.org/10.1177/09713336221080628

Wang, Q., Liu, S., Wang, F., & Shi, W. (2024). How Money Scarcity Influences Individuals’ Cognitive Control. Sage Open, 14(2), 1–14. https://doi.org/10.1177/21582440241253740

Zhang, L., Xu, M., Du, X., & Qiao, L. (2025). Impact of a Scarcity Mindset on Proactive and Reactive Cognitive Control: The Role of Motivation and Cognitive Ability. Psychophysiology, 62(3). https://doi.org/10.1111/psyp.70001

External links

• How can a scarcity mindset lead to hoarding tendencies? (ABC Listen)
• How to spot scarcity mindset in your decision making and transform it to abundance (Youtube)
• The psychology of scarcity (American Psychological Association)
• There will always be more: overcoming Scarcity mindset (Headspace)