Bad Decisions: How Scarcity Trap Affects Our Thinking

When it comes to making decisions, being in a state of scarcity can trap people into making bad choices.

This is because when people are focused on meeting their urgent needs, they are less able to focus on anything else.

While it is possible to reduce the impact of mistakes caused by scarcity, it is important to understand that these mistakes are often unavoidable.

For busy people, carving out time for unplanned activities might help reduce the stress of having too much on their plate.

In this interview on NPR’s morning edition, a Harvard economist finds there are psychological connections between the bad financial planning of many poor people and the poor time management of busy professionals. In both cases, he finds the experience of scarcity causes biases in the mind that exacerbate problems.