The Scarcity Effect is the cognitive bias that makes people place a higher value on an object that is scarce and a lower value on one that is available in abundance.

What are the three effects of scarcity?

What are the effects of scarcity? The scarcity of resources may lead to widespread problems such as famine, drought and even war. These problems occur when essential goods become scarce due to several factors, including the exploitation of natural resources or poor planning by government economists.

How scarcity affect our choices?

The ability to make decisions comes with a limited capacity. The scarcity state depletes this finite capacity of decision-making. ... The scarcity of money affects the decision to spend that money on the urgent needs while ignoring the other important things which comes with a burden of future cost.