What is the scarcity mindset in simple terms?

When money or time is short, worry fills the mind and leaves less room for other thinking.

Does it mean poor people decide badly?

No; anyone in scarcity is affected, so the problem lies in the situation.

Scarcity Mindset

🧠 Psychology By CampusDown Wiki Editorial Team Last updated October 27, 2026

Scarcity theory holds that feeling short of resources such as money, time or food captures the mind, narrowing attention and reducing cognitive bandwidth, the mental capacity available for other thinking and planning. Sendhil Mullainathan and Eldar Shafir developed the idea.

Contents

1. Tunnelling and bandwidth
2. Poverty and cognition
3. Critiques and policy
4. FAQ
5. References

Tunnelling and bandwidth

Mullainathan and Shafir (2013) argued scarcity focuses attention but pushes other concerns out of view. Shah and colleagues (2012) found resource-poor participants over-borrowed, linked to mental accounting.

Poverty and cognition

Mani and colleagues (2013) found financial worries lowered test scores and farmers scored better after harvest, a psychological route into the poverty trap. Haushofer and Fehr (2014) reviewed poverty, stress and decisions.

Critiques and policy

Carvalho and colleagues (2016) found little payday effect, Shah and colleagues (2015) showed scarcity can sharpen value judgements, and de Bruijn and Antonides (2022) urged behavioural policy design such as simpler applications.

FAQ

What is the scarcity mindset in simple terms?: When money or time is short, worry fills the mind and leaves less room for other thinking.
Does it mean poor people decide badly?: No; anyone in scarcity is affected, so the problem lies in the situation.

Sources reviewed: 2026-10-26

References

Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. Times Books. The main book on scarcity theory.
Shah, A. K., Mullainathan, S., & Shafir, E. (2012). Some consequences of having too little. Science, 338(6107), 682–685. Scarcity narrows focus and drives borrowing.
Mani, A., Mullainathan, S., Shafir, E., & Zhao, J. (2013). Poverty impedes cognitive function. Science, 341(6149), 976–980. Poverty taxes cognitive bandwidth.
Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Science, 344(6186), 862–867. Review of poverty psychology.
Shah, A. K., Shafir, E., & Mullainathan, S. (2015). Scarcity frames value. Psychological Science, 26(4), 402–412. Scarcity can sharpen value judgements.
Carvalho, L. S., Meier, S., & Wang, S. W. (2016). Poverty and economic decision-making: Evidence from changes in financial resources at payday. American Economic Review, 106(2), 260–284. Payday test finding limited effects.
de Bruijn, E.-J., & Antonides, G. (2022). Poverty and economic decision making: A review of scarcity theory. Theory and Decision, 92(1), 5–37. A review of scarcity theory.

Reports and materials that use this theory (Korean)

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This article was last updated on October 27, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.