Book Review: Influence

37 minute read


Robert Cialdini’s Influence is a classic book about marketing and psychology. Cialdini outlines six non-obvious “weapons of influence.” For each, he outlines when it’s used, why it works, and how to protect yourself.

Here’s the paperback and audiobook.

Utility: ⭐⭐⭐⭐⭐ (5/5)

Writing: ⭐⭐⭐⭐ (4/5)

The six “weapons of influence”, explained in more details below, are the following:

  1. Reciprocation: If I give you something, whether it’s a gift or a concession, you’ll give back.
  2. Commitment and Consistency: Once we identify with a behavior or decision, we follow through.
  3. Social Proof: We look to those around us to figure out proper behavior.
  4. Liking: If you like me and can relate to me, you’re more likely to buy from me.
  5. Authority: We follow (those who appear to be) authority figures.
  6. Scarcity: Goods seem more valuable when supplies are limited.

I loved this book. He’s a professor of marketing and it shows; he exudes charisma through the page. The book is fast-paced but gives you the depth you’re looking for. My one complaint might be the cohesion (some ideas aren’t pulled together very well), but as long as you’re paying attention, it shouldn’t matter.

The subject matter was so relevant that I noticed these principles at play throughout my week.

  • How did Melvin the manager opened rent negotiations with a concession. He drops the price by a fourth, even more than I asked for. Later on, when he reveals the not-included’s and hidden fees, I oblige.
  • I jog with my consulting club on Strava. Publicly posting all your runs holds you accountable to what you say. If I tell someone that I jog every other day, then my feed better say so. I follow through.
  • At debate practice, engagement comes in cascades. If all the other students are black boxes in the Zoom window, there’s no way in hell that you’ll flip on the video. On the other hand, if you’re in a breakout room and half the other people are chatting it up, shouldn’t you join in too?
  • My interviewer shared nearly nothing with me. He grew up abroad, went to a different school, and had different interests. But we both majored in CS! I took that and ran.
  • I usually use Reddit to help me make decisions, and it’s interesting which comments influence me the most. It seems that whoever writes the longest and most formal post commands my attention because I associate stuffy writers with expertise and maturity. On reflection, it seems silly. Why should some prune to decide which pull-up bar I buy?
  • Chick-fil-a is always more tempting on Saturday.


These are the most thorough notes I’ve ever taken. The content justifies it. If these ideas interest you, I would definitely get the book; it provides extra examples and gets into the nuances.

1. Weapons of Influence

Compare the following;

  • After struggling for months to sell a set of turquoise jewelry, the store owner mistakenly doubles the price. They sell out instantly.

  • A turkey mother uses a “cheep-cheep” sound to identify its chicks. If a chick doesn’t make the the sound, the mother will eat it. If a predator goes “cheep-cheep”, the turkey will attempt to protect it.

Animals use fixed-action patterns to easily decide how to behave. Most of the time, these automated responses are beneficial. Humans also have these circuits. Like animals, humans need shortcuts to process complicated environments. The growth of civilization can be seen as one long process of choice automation. But, the same shortcuts can be used to manipulate us.

In the animal world, a group of species called mimics take advantage of trigger features. Insects can lure male fireflies by mimicking their mating dance, turning them into an easy meal. Among fish, the saber-toothed blenny will use the benign disguise of being a “cleaner” fish to sedate larger fish and take a bite. Among humans, people will use weapons of influence to get their way in social environments. Some examples:

  • One phenomena is that people are more willing to do a favor (“May I use the copy machine?”) when provided provided with a reason (“…because I’m in a hurry?”), even when the reason is nonsensical (“…because I have to make some copies?”). The word “because” triggers automatic compliance.

  • The jewelry store found success through the mental shortcut of “expensive = good.” Tourists saw the higher price and assumed the turquoise was higher quality.

  • Coupons—even when they offer no discount are still just as effective at turning customers out.

Weapons of automatic influence are mechanic and exploitable. They are also subtle, like the practice of jujitsu. Exploiters exert little personal force, manipulating without the appearance of manipulation.

One example is the contrast principle. Students rate a picture of someone of their preferred sex as less attractive if they first look through ads in magazines. Students soak one hand in hot water and another in cold water; after moving both to the same lukewarm water, the hands feel cool and warm simultaneously.

Some practical examples:

  • Clothing stores will sell expensive pieces first, knowing that customers will view cheaper (but still expensive) items as much cheaper by comparison. Otherwise, the converse effect comes into play: seeing reasonably priced items first exaggerates the price of the expensive item.

  • Some real-estate companies have “setup” properties, intentionally run-down and overpriced houses that make subsequent, actual properties seem much more attractive by comparison.

  • Car dealers will close a deal for a car before offering to sell accessories like radio, which by then appear trivial in comparison.

2. Reciprocation

The reciprocity rules commands us to repay what another gives us. Studies show that the rule is ingrained in every society, suggesting that it developed as an adaptive mechanism for humans. It makes sense—reciprocation enables division of labor, exchange of goods and services, and interdependent relationships.

In 1985, Ethiopia’s ruined economy lay waste to its population. Yet, Ethiopia sent $5,000 in aid to help earthquake victims in Mexico cities. Why? Repaying a debt. Mexico had sent Ethiopia aid in1935. The rule applies at the highest scales.

The reciprocity rule can be exploited. In one study by Regan, select subjects would get a gift of Coke from a fellow research subject (who was a plant). Later, the plant would ask a monetary favor of the subject. Subjects who received the Coke were much more likely to help out. More impressively, the effect persisted regardless of how the subjects perceived the plant—it wasn’t that they liked him, but that they felt obligated.

Here are examples of the rule in action:

  • The Hare Krishna Society takes advantage of this rule. They used to solicit on the streets with elaborate rituals, but ended up scaring away potential donors. Their new strategy involves handing small gifts (like a flower or a book) to passerby’s in airports and then suggesting a donation in return. The reciprocity rule worked wonders and they made huge gains in funding.

  • The rule also appears in politics. Officials regularly trade favors to pass one another bills, which is why Lyndon Johnson passed so many bills despite opposition. On the other hand, Jimmy Carter—a political outsider—failed to pass bills because of a lack of political capital. Political contributions are another obvious example of the reciprocity rule. Corporations will fund both sides of a campaign because their real intention is just to extract favors. Even local political organizations keep candidates in office by providing a bunch of small favors to voters.

  • In merchandising, reciprocation appears as the “free sample.” People feel bad about trying the food and simply returning a toothpick. A spin on this tactic is the BUG, a “free sample” of Amway products delivered to people’s doorsteps. Unsurprisingly, people will often give in and end up purchasing the goods.

  • The rule is even in effect during war. During World War II, a German soldier had snuck up and captured a soldier for interrogation, only to let him go after the captive gave him some bread.

  • The reciprocity rule comes into effect even if the favor is uninvited. The Disabled American Veterans organization sends out small gifts when requesting donations. People, in turn, feel obliged to give back.

People are biologically hardwired to return favors because at a societal level, it encourages generosity. That’s why people in the Regan study all accepted the free Coke, and it’s why Hare Krishna is able to extract donations from even the stingiest of travelers. The Hare Krishna know that no one actually wants their gifts— they resupply their flower reserves by picking the trash cans down the hallway.

The rule is powerful because it enables one person to choose the nature of the debt-canceling favor. In the Regan study, people bought tickets worth five times more than the Coke. And it scales up too. If someone jump starts your car, you might be willing to let them borrow your car if theirs in the shop, even if it could lead to a wreckage. The reasoning is twofold. First, we are so uncomfortable with indebtedness that we are willing to overcompensate. Second, free riders are ostracized from the social group. Both factors create psychological pressure to repay.

A subtler application of the rule has to do with concessions. If I come to your house and ask you to pay 20 dollars for me to sing you a song, you will most certainly reject my request (the cost is high and the “benefits” are negative). If I then offer instead to sell you chocolate at $1 apiece, you’d be a lot more willing to buy those bars.

Studies seem to confirm the effect. When college students are asked to chaperone delinquents for a trip to the zoo, the vast majority say no. But when they are first asked to counsel the juveniles for two years—an extreme request—three times as many agreed with the zoo trip.

Of course, the “rejection-then-retreat” technique only works when the initial demands are still reasonable. Otherwise, the requesting party isn’t seen to be acting in good faith.

The rule gains the added force the contrast principle, since the smaller request will appear extra-small in comparison to the initial request.

Some other applications include:

  • TV sets, where writers will pack a script with profanities in order to sneak their original, much more modest content past network censors.
  • Sales people will retreat to asking for referrals if they can’t a purchase.
  • The Watergate scandal was approved by otherwise-rational CRP director Mitchell only after Liddy had made two previous requests for even more outlandish schemes.
  • Retail stores “talk the top of the line.” The salesperson first presents the overpriced, deluxe model. If the customer denies it, they offer a more reasonable model that appears attractive by comparison; if the customer accepts it, hooray!

One would think that victims could grow resentful and, in retaliation, refuse to live up to the agreement or distrust the requester. Yet research demonstrates the opposite, as the show-up rate of the rejection-then-retreat procedure was much higher.

The explanation is that people feel more responsible for and satisfied with an arrangement when a concession is made. They feel responsible because it appears as if they had induced the concession; satisfied because they perceive a fairer deal.

How can we resist the rule? Trying to avoid every offer is impractical and often rude. Instead, we should accept genuine offers and notice when a initial favor is truly a compliance tactic. A small mental act of redefinition—this is a trick, not a favor!—can reduce the psychological burden of just saying “no.”

3. Commitment and Consistency

Consistency is a central motivator of behavior. In most circumstances, consistency is a good trait. It shows intellectual strength. It’s associated with rationality, stability, and honesty. Some examples of consistency at play include:

  • t the racetrack, gamblers become more confident in their horse of choice after they place their bet.
  • After someone agrees to a relationship, they may become ever more certain in their choice.
  • People won’t ordinarily intervene in the middle of a petty theft. But, if they agree beforehand to watch the stolen property, then people will chase down the thief.

But consistency also tempts us with mental shortcuts, releasing us from cognition and leading us to potentially disastrously consequences. Even more worryingly, these automated decisions are outside of conscious control. People will strive for consistency so much that they will actively avoid having to challenge their beliefs.

Consistency functions can be exploited by companies, non-profits, and governments alike:

  • Toy companies will understock in-demand toys right before Christmas. Parents, who have promised their kids to buy the hottest toys, find out that there are none left. They are forced to buy twice—first a substitute gift for Christmas, and then again after the stores restock.
  • Residents are surveyed about whether they would be willing to canvas for the American Cancer Society. Since there’s no commitment, most people say “yes.” When the ACS actually comes calling two weeks later, those same people are inclined to agree.
  • More subtly, charity workers will ask people how they feel. If someone replies that they are “doing well,” then they feel much more pressure to donate to those who aren’t “doing well.”

One way to exploit consistency is to start small. That beachhead can manipulate a person’s self image and become the basis for long term behavioral changes.

  • During the Korean War, Chinese POW camps tried to instill communist beliefs in American prisoners. They were asked to make small concessions like “The U.S. isn’t perfect” and were encouraged to elaborate in essays. After that first commitment, the soldier would begin to view themselves as a collaborator with the Chinese and act accordingly.
  • Sales people start small. Even if the first sale is not worth the time and effort, the company has acquired a customer.
  • People who agree to put a tiny “Be a Safe Driver” sign on their lawns were much more likely to agree to a larger, much more hideous sign. In fact, even signing a petition about unrelated civic duties several weeks beforehand could increase he chance of a “yes.”

Written commitments are often more powerful than verbal commitments. The Chinese POW camps had people write out pro-Communist statements in addition to speaking them. A soldier’s written words are public physical evidence of his beliefs, and studies show that people will attribute the words to his thoughts even if they knew that he had done so under duress. The consistency effect has two channels: internal pressures to conform, and the expectations of others.

The Chinese had several ingenious ideas. First, they censored and occasionally threw out mail, prompting prisoners to voluntarily infuse pro-communist views in their letters in the hopes that they will get through. Second, they held essay contests for small prizes, occasionally rewarding pro-American essays, but highly encouraging communist beliefs.

Some other applications:

  • Amway Corporation found that by having customers sign their own contracts, they were much less likely to back out.
  • P&G and General Foods used to hold testimonial contests, where huge prizes would be awarded for short “Why I like…” entries. The goal, obviously, is not to obtain great pieces of writing, but to get people thinking about why they like a product.
  • Accountability mechanisms, like my New Year’s Resolution post. It’s motivating to have your public image on the line, even if it’s only for a couple of visitors.

One key reason that writing is effective is precisely the effort that goes into it. An African tribe called the Thonga hold a brutal, three-month initiation ritual for their teens. Similar but on a lesser scale, college fraternities will put their pledges through “Hell Week,” a humiliating process which can, in extreme cases, cause permanent injury and death. These practices are also pervasive throughout the army, and legendarily so in the Marines.

Research provides an answer. People who go through hazing in order to join a group are more likely to view the group positively. Acts of group survival spur future members to view the group as more attractive and worthwhile. Unsurprisingly, beating yourself up increases your commitment to a group.

Some puzzles remain. First, some colleges have tried to replace “Hell Week” with “Help Week,” a labor-intensive public service effort. Fraternities reject attempts to make Help Weeks a part of initiation procedures, despite it providing the same stress test and obvious PR benefits. Second, the Chinese essay contests offered only tiny prizes—often just a cigarette. If they wanted more submissions, they could’ve given out bigger rewards.

The answer to both of these is simple: the pointlessness of going through pledging or writing an essay forces people to own their actions. Pledges can’t justify “Hell Week” by referencing the public good. POWs can’t justify their essays on the basis of a few puffs of smoke. The lack of external pressures means that they can only attribute their actions to themselves.

Inner responsibility should inform the way we bring up children. Threatening to punish them for bad actions may be effective in the short-term, but it doesn’t produce long-term compliance. Instead, as studies show, having children choose for themselves to make a certain decision is much more likely to influence their future behavior.

Inner change is powerful because they produce lasting, cross-context changes. They also become self-justifying. Some examples:

  • Someone who starts to see themselves as a good citizen will begin to adopt new arguments for why civic action is good. These will continue to justify his choice, even when the initial reason falls away.
  • Shady car dealers will “throw a lowball” by offering customers an extremely good deal. Then, just as they’re at the register, they juke the customer by saying they had made a mistake and need to charge an extra few hundred dollars. Now that they’re just about to sign the contract, the customer will often oblige, having convinced themselves of why this dealership is right for them.
  • Researchers successfully got residents to lower their gas consumption by telling them that they would be praised in a newspaper. Interestingly, when they broke the disappointing news that there would not, in fact, be such a public announcement, those same residents lowered their gas consumption even more. The result has been replicated for air conditioner usage too. People not only had come to justify their lower energy usage, but once the external reward was taken away, they could fully rely on intrinsic rewards.

How should we resist consistency traps? Again, we should distinguish between consistency and foolish consistency. If you ever feel under pressure by a marketer to be consistent and buy, tell them to their face that you know their trick! Another tactic is to trust your gut. Studies show that we experience our feelings split seconds before making a conscious decision. That feeling can pierce through the armor of rationalizations.

4. Social Proof

We often assess our beliefs through the principle of social proof: a behavior seems more correct in a situation if other people are doing it. Some applications:

  • In surveys, people universally say that they dislike canned laughter. But in studies, canned laugher causes audiences to laugh longer and more often. We are fooled by the perception that other people are laughing.
  • Churches and bars sat tip jars with a few dollar bills before service.
  • Evangelical preacher Billy Graham used to hire thousands of people to come to his appearances.
  • Advertisers tell us that “everyone” has a product.
  • A child with a fear of dogs can permanently cure their phobia by watching (even just a recording of) a similar peer play with dogs.
  • Socially withdrawn preschool children become sociable after watching a film where a lonesome child joins their peers and enjoys it.

One fascinating example of social proof is the behavior of doomsday cults. Of course, whether it’s the Anabaptists or the Millerites, there’s a day where they end up (un)spectacularly disproven. But they usually react by doubling down in their beliefs. In the case of a Chicago-based cult, followers had cut off family ties, abandoned their professions, and sold their possessions in preparation for the “End.” Following the uneventful End, they decided to recruit new converts to the cult: more people in the cult to buoy their own faiths.

Uncertainty is a powerful trigger of social proof, and in some situations, it can lead to “pluralistic ignorance.” It is the failure of groups of bystanders to aid those in need of help, and the classic example is Kitty Genovese. She was stabbed to death over half an hour in Queens, New York, with thirty-eight witnesses, none of whom called the police.

A popular explanation was the city-caused apathy theory, that living in a metropolis like New York desensitizes people to others. But later research identified the key point: there were 38 witnesses. With so many other witnesses, each person believes that someone else will help. And, importantly, each person sees the inaction of others as proof that no real emergency is going on.

In studies, someone experience a seizure got help more often when only one person was standing by. In another, people were less likely to report smoke coming from under a door if others were present in the room, much less so if those people were coached to not react. Again, certainty is the key factor. If a maintenance man is clearly hurt in an accident, passerby’s will almost always help. but, if they can’t be sure if it’s an emergency, pluralistic ignorance takes over.

We don’t need to reference “urban depersonalization” to explain the Genovese incident. Urban areas are more clamorous, populous, and unfamiliar, all of which decrease bystander aid. If you find yourself in a crowd and need assistance, pick a target and make an unmistakable request for help.

Another aspect of social proof is the role of similarity. People are more likely to return a wallet if they have reason to believe that they’re helping someone like them. It applies to children too. An easy way to get a aqua-phobic child to get in the pool is to have them watch a peer having fun in the water.

A morbid example of the importance of similarity has to do with suicide in the news. Consider the following facts:

  • After a highly publicized suicide, deaths in airplane and car crashes spike up.
  • In regions where the suicide story doesn’t appear in the news, no such spike occurs.
  • The wider the publicity, the greater the increase in crashes.
  • Stories that report suicide victims dying alone are only followed by increases in single-fatality wrecks. Stories about suicide-murders increase multiple-fatality wrecks only.
  • If a crash happens after a front-page suicide, it likely to be more deadly.
  • A young suicide victim cause crashes for young people. An older suicide victim induces crashes among the elderly.

What ties these facts together? People who read about suicide are more likely to contemplate their own suicide. They do so by intentionally crashing their car or by diverting a plane. People are more likely to respond if they are similar to the victim, and they are more likely to copy the victim’s method of departure.

The same phenomena occurs in boxing. After a widely covered championship fight, the homicide rate selectively increases. If a black fighter lost, then more black men are killed. If a white fighter loss, then more white men are killed. Publicized aggression spreads to similar victims.

A final case study is the infamous People’s Temple. Jim Jones led a cult to a settlement in Guyana, South America. After the demise of the group became imminent, Jones ordered his community to commit mass suicide. Shockingly, his followers patiently got in line, drank poison, and promptly died.

The characteristics of the people shed some light. His followers were poor and uneducated and Jones was a charismatic figure. Yet this alone doesn’t explain enough, since events like these are unprecedented. The crucial factor, it turns out, is the environment. Jones’ followers were brought to a dangerous and unfamiliar environment where the natural psychological response would be to resort to social proof.

During the suicide, the first few obedient individuals sent a cue to the rest about proper behavior. The rest of the cultists, each of which is likely worried and unsure, take each others’ silence as evidence of compliance. Jones was able to convince people to kill themselves not by the power of charisma, but by leveraging the power of social proof.

Once again, the right way to respond is not to ignore the actions of others. if we need to figure out where to throw away our lunch tray, then the behavior of others is indefensible. But we should be keen to misinformation and deceit If an advertisement flaunts around blatantly staged interviews, consider it noise. More importantly, never put all of your trust in social practice. Even absent malicious intent (as in the bystander effect), modeling a group can lead you horribly astray.

5. Liking

Tupperware parties are a powerful marketing scheme because they tie the act of purchasing to respect for a friend. It’s a testament to the power of the friendship principle that they make millions of sales. You see it elsewhere:

  • Charities recruit volunteers to canvass in their neighborhoods.
  • Shaklee salespeople use an “endless chain” method, repeatedly following referrals to new customers.
  • Legendary car salesman Joe Girard broke sales records by offering “a fair price and someone they liked to buy from.”

What makes someone like you? Here are some factors:

  • Physical attractiveness. Studies show that handsome politicians, well-groomed applicants, good-looking defendants, and attractive people in need fare better than their less-than-pretty counterparts. The mechanism is the halo effect, where we automatically assume that attractive people are more talented, kind, honest, and intelligent.

  • Similarity. People who dress like us, come from the same place, or are otherwise similar are more likely to receive our help or get us to pay up.

  • Compliments. Joe Girard used to send thousands of generic postcards to his past customers with great success. Even when we know that praise isn’t genuine, we are still inclined to like the flatterer.

  • Contact and Cooperation. We like reversed pictures more than their originals because we’re more familiar with how we look in a mirror. The same happens with familiar names and flashes of faces. But contact isn’t intrinsically good. Forced desegregation exacerbated racial hostilities because cutthroat classrooms made students of different races compete against one another. Contact becomes beneficial when it is placed in a cooperative context, like a group puzzle or some other collaborate effort.

    You see this at play in Good Cop/Bad Cop. An aggressive officer begins by insulting the accused and threatening harsh punishments. Then, a tempered officer intervenes to “defend” the accused, encouraging them to cooperate in order to avoid a longer sentence. It is surprisingly effect.

  • Conditioning and Association. Weathermen across America receive death sentences for bad weather. Weather, of course, that they did not cause. Our associations with objects, good or bad, obvious or illogical, can powerfully influence how others perceive us. It’s why advertisers want to associate their product with celebrities, and why political operatives will make their statements at luncheons (while everyone is eating delicious food). It’s Pavlovian—just as a dog will associate a bell with a treat, a human can be trained to associate [good thing] with your product.

    One World War II soldier provides a beautiful example. He came home unharmed but inexplicable refused to speak. That is, refused to speak but for one time, in a veterans hospital, when he cursed at his radio when a referee made a bad call against his home team. The example demonstrates the strength of the tie between our identity and sports teams, a bond strong enough to inspire riots and elation. Studies show that people will try to identify with a winning team (using words like “we”) and distance themselves from a losing team (by referring to “them” or “the team”)—that is, unless they are manipulated to be confident in themselves.

Of course, we shouldn’t just discard charismatic people. Most of the time, hanging out with people you like is a good thing. To guard yourself against corrosive instances of liking, you should constantly ask yourself: am I liking this person too easily? If so, separate the person from whatever they’re trying to sell and evaluate the product by itself.

6. Authority

Stanley Milgram’s legendary experiment demonstrated the power of authority. When nudged by an experimenter, average people were willing to incrementally shock a (fake) fellow participant to the point of tears and hysteria. They didn’t like it—subjects are visibly upset and often asked to stop. But they continued because they felt a duty to obey the lab-coated researcher. In fact, when the nudger was replaced with a fellow subject, obedience rates disappeared. And, when the experiment was repeated with two disagreeing researchers, people would first beg them to agree, and then decide not to continue.

Other examples:

  • A Vietnam vet lay on a railroad to protest a shipment of military equipment. The train operators knew he was there but, following orders, steered the train ahead and cut off his legs.
  • Religious figures like Abraham praise the virtue of obedience to divine authority.
  • People trust their doctors. And so do nurses. In experiments, even if an unfamiliar doctor proscribes a dangerous treatment, nurses will dutifully carry out their orders. Deference in hospitals contributes to widespread and deadly medical errors.
  • Robert Young, an actor who played a doctor, was asked to give his medical blessings to Sanka Brand coffee in an advertisement. Even a fictional authority can be effective.
  • Con artists will present themselves as doctors, judges, and other professionals. In fact, titles are so influential that people perceive titled professionals as taller.
  • Wearing authoritative garb—a police uniform, for example—greatly increases compliance with orders. It works in more settle ways too. When a jaywalker is dressed as a business professional, people are more likely to follow.
  • Luxury goods like sports cars can play the same role. People are much more hesitant to honk at a Lamborghini than they are at my car.

Deference to authority is clearly helpful; listen to your parents, your doctor, and your boss. But when you notice an attempt at influence by authority, stop and ask yourself: “is this authority truly an expert?” On reflection, Robert Young and the jaywalking businessmen have no such qualifications. If they pass the first test, follow up by asking: “are truthful can we expect the expert to be?” If authorities have ulterior motives (for example, if they’ve been paid to do an advertisement), then their advice should be treated as such.

7. Scarcity

Goods that are rare or becoming rare will appear to be more valuable. It’s the principle motivating baseball card and antique collectors. Advertisers use it all the time by announcing that there are only “limited numbers” of a product. Some examples:

  • Announcements that “there are only three of these left in the state!”, or “production is backed up, get ‘em now!”
  • When shoppers seem interested in a particular product, salespeople will break the news that the very product of interest has just sold out. But, the salesperson points out, they are willing take a look in the backroom (where supply is plentiful) on the condition that the shoppers commit to buying. Ka-ching.
  • Deadlines and limited-time offers are also a type of scarcity. The most powerful form is when a customer is told that unless they buy right now, the price will go up.
  • Boiler-plate operations scam people out of millions by pitching stocks that “no one else can get!”

Like the other shortcuts, our concern for scarcity is practical. We often need to use availability to determine quality. Moreover, losing resources tends to restrict our choices, impinging on our freedoms.

Psychologists identify the freedom-based mechanism in toddlers. When children begin their third year of life, they start resisting their parents and disobeying orders. In studies, two-year-old children prefer toys that are harder to reach, on balance. We can read this as a need to “test the limits” of their freedom, a natural impulse at a time when toddlers are finding a sense of self.

Teenagers, of course, are the other troublemakers. In a well-documented phenomena called the “Romeo and Juliet effect,” teenage lovers will feel more attached to their partners if their parents attempted to interfere with the relationship. When mom and dad got out of the way, they felt less attracted to their partners. The scarcity imposed their parents is precisely what made the relationship so enticing.

There are numerous examples of restrictions backfiring:

  • The town of Kennesaw passed a strange law requiring the ownership of firearms. Sales shot up, but not from the townspeople. Tourists flocked to their gun shops because of the publicity, but the residents—whose freedom had been impinged upon—were decidedly not excited about complying with the law.
  • Dade County passed a law banning the position of phosphate-based cleaning products. People began to stockpile them and, more importantly, started to view phosphate products as better than non-phosphate goods. After all, there’s a reason they banned them!
  • Banning information is especially counterproductive. People tend to believe that any information worth being banned is also valuable to them. It’s why restrictions on porn would never work—it only makes it more exciting. When students are told that a book is for “adults only,” they enjoyed reading the book more.
  • In juries, judges may rule a piece of evidence inadmissible and tell the jury to ignore it. Obviously, the jury is still aware of the evidence. Is scarcity at work in the courtroom? A study found that when a piece of information is ruled inadmissible, jurors give that piece of information even greater weight.

We’ll wrap up with a study about cookies. Here are the findings:

  • The Expected. People are given a jar with either ten cookies or two cookies. Unsurprisingly, people think the cookies taste better when there are only two.

  • Loss. People are first given a jar of ten cookies. The jar is then taken away and replaced with the jar with two cookies. They like the cookies even more.

    Scarcity is especially poignant when we first get a taste of abundance. Throughout history, revolutions, revolts, and internal wars tend to happen during sudden downturns of social conditions. When people have gotten a taste of the good life and have it taken away, they take the the streets en masse.

    You could see it in 1960s America, during a period of racial conflict. After World War II, black people started to make rapid political and economic advancements. But then, legal change from the Supreme Court started to get watered down on the ground. As progress slowed and the economy soured, racial animosity turned in riots and demonstrations.

    It happened during Gorbachev’s administration too. He began liberalizing the country, giving Russians a taste of freedom and prosperity. When hardline communists enacted a coup, thousands of citizens emerged to defend Gorbachev. They wanted to keep their cookies.

  • Competition. The jar of ten cookies is replaced with the jar of two cookies. And, the researchers tell the subject that the cookies were being given away to other research subjects. When the scarcity was induced by social demand, the cookies were once again valued more.

    Competition plays a crucial role in scarcity. Advertisers know this, and it’s the reason why Black Friday sales can result in mayhem. When a sale is framed as a competition, people are much more willing to open their pocketbooks. It’s why, when a customer is on the fence about a product, a salesperson will inform them that someone else is also interested. It’s also why auctions can sell goods at unreasonable prices.

  • A Way Out. Although the cookies were valued more highly, the subjects thought they all tasted the same. The key for us is to disentangle the utility of a given good from the joy of mere possession. If we ever feel emotions creeping into our purchase decisions, we should recalibrate our mindset and clarify our goals: do we want to have it? or do we want to use it?

    Act accordingly.