Thursday, June 2, 2016

Scarcity (A Book Review)

I've been reading Scarcity, a book by Mullainathan and Shafir. Their thesis is that our reaction to scarcity contains a hidden logic that is equally applied to those without enough time and those without enough money.

The effect scarcity has on people is that it tends to increase focus and create tunnelling. The increase in focus brings whatever is perceived as scarce to the forefront of peoples's thinking but the effect of tunnelling over emphasizes this scarcity to the point where it effects other aspects of their life.

For example, a scarcity of time or money creates a focus on those things to the exclusion of other things, such as personal relationships. The exclusion of other things means that scarcity brings new perspective and that new perspective is often detrimental to resolving the issue. That is why busy people stay busy and poor people stay poor.

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