It's been a while since my last post as I've been taking some time off. But I'm back now with a new summary for Scarcity: The True Cost of Not Having Enough by Sendhil Mullainathan and Eldar Shafir.

As usual, the key takeaways are below, and you can find the full summary by clicking the link above.

KEY TAKEAWAYS

• What is scarcity?
  • Scarcity is when we have less than we feel we need.
  • While the book mainly discusses money and time scarcity, it can also apply to things like counting calories or packing a suitcase.
• Scarcity captures the mind and changes the way we make decision:
  • “Captures” — the process is unconscious and uncontrollable.
  • Scarcity creates a focus dividend, eliminating distractions and helping us concentrate on the task at hand.
  • But it also causes tunnelling — we focus on the short-term and overlook important, longer-term things that fall outside the tunnel.
• Scarcity taxes mental bandwidth:
  • One component of bandwidth is cognitive capacity, the ability to solve problems, apply logical reasoning, etc.
  • The other component is executive control, our ability to plan, pay attention and control impulses.
• The scarcity trap describes how people fall behind and stay behind. Scarcity increases both the risk of failure and the costs of failure.
• The opposite of scarcity is slack or abundance.
  • Slack is a mental luxury that lets us choose without noticing the trade-offs involved, which simplifies decision-making.
  • Although slack can lead to inefficiencies and waste, it also gives us room to fail.
  • Escaping the scarcity trap requires enough slack to absorb shocks.
• Understanding the psychology of scarcity can help us in our own lives and improve the design of social programmes.

As usual, you can find the full detailed summary on the website. If you found this summary useful, consider forwarding it to a friend.

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​To Summarise​