Scarcity
The Basic Idea
There is a limited quantity of resources available to us. However, our desire for these resources is theoretically limitless. This discrepancy between supply and demand is referred to as scarcity. Scarcity gives rise to the challenge of allocating resources in a manner that satisfies as many basic needs and additional demands as possible.1 Abundance is the opposite of scarcity.
Prime examples of scarce resources are time and money. Frequently, people find themselves with an abundance of one, while significantly lacking the other.2 A doctor, for example, might turn an impressive salary, but work well over forty hours a week, leaving them with very little time for themselves. Every resource comes at a cost; in this situation, the doctor’s abundance of money costs them a significant amount of their time. Although some resources may be available in a seemingly vast supply, they are still considered scarce, in a technical sense, because there is only a finite quantity available.
Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.
– Lionel Robbins (1932).
About the Authors
Dan Pilat
Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.
Dr. Sekoul Krastev
Dr. Sekoul Krastev is a decision scientist and Co-Founder of The Decision Lab, one of the world's leading behavioral science consultancies. His team works with large organizations—Fortune 500 companies, governments, foundations and supernationals—to apply behavioral science and decision theory for social good. He holds a PhD in neuroscience from McGill University and is currently a visiting scholar at NYU. His work has been featured in academic journals as well as in The New York Times, Forbes, and Bloomberg. He is also the author of Intention (Wiley, 2024), a bestselling book on the science of human agency. Before founding The Decision Lab, he worked at the Boston Consulting Group and Google.
