Scarcity and intertemporal choice.

Abstract

Scarcity often encourages decisions that favor the present over the future. While prevailing theories largely attribute these decisions to myopic, impulsive decision making, five studies find support for an alternative, less prevalent perspective. We introduce the time horizon of threatened needs as an important determinant of scarcity's effect on intertemporal choice, demonstrating that people's decisions under scarcity reflect attempts to address threatened needs. Data from the Federal Reserve Bank of Philadelphia (Study 1) and preregistered studies (N = 10,297) show that time horizon moderates intertemporal decisions under scarcity. Study 2 manipulates scarcity perceptions among people engaged to be married, leading to increased preferences for sooner outcomes when wedding dates have shorter time horizons and a significant reversal when wedding dates have longer time horizons. Study 3 demonstrates that time horizon predicts intertemporal choice only when the intertemporal choice can help address threatened needs. Study 4 holds expense salience constant and replicates the moderation by time horizon using a paradigm that manipulates both scarcity and time horizon. Study 5 introduces multiple needs that vary in time horizon and importance, finding that decisions under scarcity reflect consideration of both the importance and temporal proximity of needs. These findings align with the perspective that people facing scarcity attempt to make decisions that are contextually appropriate. This work underscores the importance of understanding contextual variation in experiences of scarcity, suggests that decision making under scarcity is less thoughtless than presumed by the impulsive, myopic account, and offers recommendations for interventions for changing behavior under scarcity. (PsycInfo Database Record (c) 2023 APA, all rights reserved).