Scarcity: Why Having Too Little Means So Much

The chapter opens with an anecdote about Chef Amanda Cohen, whose culinary innovation under the time constraints of a cooking show, Iron Chef, serves as a metaphor for how scarcity can drive creativity and efficiency. Mullainathan and Shafir observe that when Cohen competed on Iron Chef, the pressure of the timed challenge focused her mind, forcing her to condense years of experience and hard work into the immediate output of a dish. The dish she created later became a famously popular dish at her restaurant.

Mullainathan and Shafir suggest that Cohen benefited from the time crunch. This “focus dividend,” as they term it, underscores the beneficial aspect of scarcity, in which limitations on resources like time lead to heightened productivity and inventiveness. The authors point out that psychologists have studied the benefits of deadlines in controlled settings. In one study, in which undergraduates were paid to proofread essays, one group was given a long deadline, and another group was given multiple, shorter deadlines. The group with tighter deadlines was more productive, late less often, found more typos, and made more money.

Mullainathan and Shafir collaborated with psychologist Anuj Shah to design an experiment to determine whether artificially created scarcity could produce a

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