Scarcity: Why Having Too Little Means So Much

In the concluding chapter of Scarcity, Mullainathan and Shafir reflect on the broader implications of their research on scarcity, emphasizing scarcity’s pervasive impact on cognitive capacity and decision-making. They open the chapter with a personal anecdote: The authors enjoy playing games on their phones, but they noticed that as they wrote Scarcity, their performances in the games suffered—the tension of working toward a deadline led to weak scores. Mullainathan and Shafir say this illustrates how the bandwidth tax can subtly affect various aspects of life.

The authors argue that individuals and societies at large fail to recognize and adapt to fluctuating cognitive capacities. Modern workers, who rely heavily on their mental faculties, seldom account for their mind’s daily rhythms. Similarly, social scientists and policy-makers often overlook the cognitive side of economic and social issues. Mullainathan and Shafir propose a novel concept: They suggest that countries measure Gross National Bandwidth alongside traditional economic indicators, suggesting that understanding and managing societal cognitive resources could greatly enhance public policies and social programs.

Mullainathan and Shafir shift to discussing practical applications. They ponder the potential benefits of employers offering their workers pay advances as an alternative to payday loans, thereby preventing the