The phenomenon of scarcity has a distinct effect on economics. By shaping buyers’ behaviors and the choices that they make in the environment of specific markets, scarcity leads to the necessity to prioritize one’s goals, thus, affecting the decisions that customers make when selecting specific items on their shopping lists. Even though scarcity implies that buyers have to deal with specific limitations during the shopping process, the phenomenon should not be viewed as entirely negative since it allows introducing people to the idea of sustainable consumption and helps them set their priorities straight when entering the environment of a particular market (Chen, 2016).
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The phenomenon of scarcity may lead to the creation of the bandwagon effect because of peoples; willingness to follow the standards set within their society and, therefore, make the choices that are similar to those made by the rest of their community members. Along with the bandwagon effect, the snob effect can be observed among customers because of the assumptions regarding the ostensible connection between the quality of the provided services and goods and the price thereof (Kastanakis & Balabanis, 2014). It should be noted, that the willingness to follow the crowd and the need to remain different from others can be observed in different instances of scarcity. While the bandwagon effect is traditionally associated with a rapid rise in the demand levels, the snob effect is linked directly to a drop in the supply rates (Fujiwara & Nagasawa, 2015).
Scarcity is one of the phenomena that shape buyers’ choices to a considerable extent. Prompting either the need for uniqueness or the necessity to choose the options that the rest of the community members prefer, it also informs the decisions made by companies producing services and goods. Therefore, changes in scarcity levels must be identified successfully to alter corporate strategies accordingly and adjust to new demands.
Chen, F. (2016). Poachers and snobs: Demand for rarity and the effects of antipoaching policies. Conservation Letters, 9(1), 65-69. Web.
Fujiwara, K., & Nagasawa, S. Y. (2015). Analysis of psychological factors that influence preference for luxury food and car brands targeting Japanese people. American Journal of Industrial and Business Management, 5(9), 590-600. Web.
Kastanakis, M. N., & Balabanis, G. (2014). Explaining variation in conspicuous luxury consumption: An individual differences’ perspective. Journal of Business Research, 67(10), 2147-2154. Web.