Scarcity is the condition of having insufficient resources to cope with demands. This condition presents significant challenges to the human cognitive system. For example, having limited financial resources requires the meticulous calculation of expenses with respect to a budget. Likewise, having limited time requires the stringent management of schedules with respect to a deadline. As such, scarcity consumes cognitive resources such as attention, working memory, and executive control and elicits a range of systematic and even counter-productive cognitive and behavioral responses as a result. Specifically, scarcity induces an attentional focus on the problem at hand, which facilitates performance by enhancing cognitive processing of information relevant to the problem, increasing the efficiency of resource use, and stabilizing the perception of value. Such prioritization of the problem at hand may seem advantageous, but it can produce undesirable consequences. For example, scarcity causes myopic and impulsive behavior, prioritizing short-term gains over long-term gains. Ironically, scarcity can also result in a failure to notice beneficial information in the environment that alleviates the condition of scarcity. More detrimentally, scarcity directly impairs cognitive function, which can lead to suboptimal decisions and choices that exacerbate the condition of scarcity. Thus, scarcity means not only a shortage of physical resources (e.g., money or time) but also a deficit of cognitive resources (e.g., attention, executive control). The cognitive deficits under scarcity are particularly problematic because they impair performance and lead to counter-productive behaviors that deepen the cycle of scarcity. In addition, people under financial scarcity suffer from stigmas and stereotypes associated with poverty. These social perceptions of poverty further burden the mind by consuming cognitive resources, weakening performance in the poor. Understanding the cognitive and behavioral responses to scarcity provides new insights into why the poor remain poor, identifying the psychological causes of scarcity, and illuminating potential interventions to stop the cycle of scarcity. These insights have important implications for the design and the implementation of policies and services targeting the populations under scarcity.

Resource scarcity poses challenging demands on the cognitive system. Budgeting with limited resources induces an attentional focus on the problem at hand, but it also comes with a cost. Specifically, scarcity causes a failure to notice beneficial information in the environment, or remember to execute actions in the future, that help alleviate the condition of scarcity. This neglect may arise as a result of attentional narrowing. Attentional trade-offs under scarcity can further determine memory encoding. In seven experiments, we demonstrated that participants under scarcity prioritized price information but neglected a useful discount when ordering food from a menu (Experiment 1); they showed better recall for information relevant to the focal task at a subsequent surprise memory test (Experiments 2 and 3); they performed more efficiently on the focal task but neglect a useful cue in the environment that could save them resources (Experiments 4-6); and they failed to remember the previous instructions to execute future actions that could save them resources (Experiment 7). These results collectively demonstrate that scarcity fundamentally shapes the way people process information in the environment, by directing attention to the most urgent task, while inducing a neglect of other information that can be beneficial. The attentional neglect and memory failures may lead to suboptimal behaviors that further aggravate the condition of scarcity. The results provide new insights on the behaviors of the poor, and also important implications for public policy and the design of welfare services and programs for low-income individuals.iii Lay SummaryScarcity is the condition of having insufficient resources (e.g., money, time), which presents significant challenges to the cognitive system. For example, scarcity directly impairs intelligence and can cause myopic behaviours. This neglect may arise as a result of attentional narrowing. We propose that scarcity shapes the way people process information in the environment by directing attention to the most urgent task, while inducing a neglect of other information that can be beneficial. In seven laboratory experiments, we demonstrate how scarcity causes people to prioritize task-relevant information, which facilitates memory performance, but also comes at the expense of neglecting other useful information in the environment. Ironically, this neglected information can help alleviate the condition of scarcity itself. The results provide new insights on the behaviors of the poor, and important implications for public policy and the design of welfare services and programs for low-income individuals.iv Preface These studies were conducted at the Behavioral Sustainability Lab at the University of British Columbia. All experimental design, data collection, and data analysis was conducted by the lead author, Brandon M. Tomm, under the supervision of Dr. Jiaying Zhao. Data was collected with the help of research assistants at the Behavioral Sustainability Lab.

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Scarcity poses challenging demands on the mind that can make escaping scarcity difficult. Using eyetracking and behavioral evidence, we find that scarcity induces an attentional focus, enhancing processing of scarcity-relevant information, while at the same time causing a failure to notice peripheral material, including information that may have proven beneficial in alleviating the scarcity condition. Participants were randomly assigned to a scarcity condition (with a small budget) or a control condition (with a large budget) while ordering a meal from a menu in a lab setting, while their eye gaze was tracked. We found that, compared to controls, participants under financial scarcity looked more at price information but less at the food items, calories and a discount that could alleviate their budget constraint (Experiment 1). In a subsequent memory test, participants under scarcity recalled price information more accurately than control participants (Experiment 2), and likewise those under calorie scarcity recalled calorie information more accurately than controls (Experiment 3). The results were replicated in a larger participant sample, where those under scarcity were less likely to request the discount than control participants (Experiment 4, Experiment 5 as a pre-registered replication). This neglect could be due to limited attention to peripheral information under scarcity (Experiment 6). These results support the notion that scarcity induces an attentional focus on scarcity-relevant information, while causing neglect elsewhere, including of beneficial information that can alleviate the scarcity condition. The findings help explain a range of counter-productive behaviors under scarcity and suggest ways to think about policy design and implementation to better guide attention and prevent neglect.

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