(E–pub READ) Scarcity Why Having Too Little Means So Much

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  • Scarcity Why Having Too Little Means So Much
  • Sendhil Mullainathan
  • English
  • 03 November 2019
  • null

Sendhil Mullainathan Ý 7 Read & download

Characters Í Scarcity Why Having Too Little Means So Much 107 City and the strategies it imposes the problems of modern life come into sharper focusMullainathan and Shafir discuss how scarcity affects our daily lives recounting anecdotes of their own foibles and making surprising connections that bring this research alive Their book provides a new way of understanding why the poor stay poor and the busy stay busy and it reveals not only how scarcity leads us astray but also how individuals and organizations can better manage scarcity for greater satisfaction and success. Some people say poor people have poor ways the implication being that they are poor because of their poor ways These authors maintain that the reverse is true that people have poor ways because they are poor They say it can be explained by the psychology of scarcityWhat will suprise many readers is that rich or non poor persons manifest the same behavior attributed to poor people when subjected to situations of scarcity eg lack of time In other words the rich often have poor ways too but they have enough money of cover the fiscal mistakes However the psycholgy of scarcity can show up in scarcity of time and friends as well as money and the psychology of scarcity can come into play for all social and economic classesThis book finds surprising links and similarities between the stressed out time poor of the west with the truly poor dollar a day workers of the developing world Many wealthy people who are critical of the behavior of poor people will be surprised to learn from this book that they share the same behavior patterns as the very poor when in an environment of scarcity The psychology of scarcity and its resulting behavior can be witnessed when there s a scarcity of time money or relationships with others Two terms repeatedly used in this book are bandwidth and tunneling Bandwidth refers the limited number of things that any human can focus on at one time The results of this limited bandwidth leads to a kind of cognitive tunnel limiting what a person is able to focus on at one time Limited bandwidth and tunneling depletes self control and leads to impulsive and sometimes dumb behavior Unfortunately this behavior can spiral into a trap of worsening scarcityThe authors bring an abundance of examples from their respective fields of study to support their descriptions of the psychological and behavioral conseuences of the feeling of scarcity Sendhil Mullainathan is a behavioral economist and Eldar Shafir is a cognitive psychologist

Characters Scarcity Why Having Too Little Means So MuchScarcity Why Having Too Little Means So Much

Characters Í Scarcity Why Having Too Little Means So Much 107 Mics Mullainathan and Shafir show that scarcity creates a similar psychology for everyone struggling to manage with less than they need Busy people fail to manage their time efficiently for the same reasons the poor and those maxed out on credit cards fail to manage their money The dynamics of scarcity reveal why dieters find it hard to resist temptation why students and busy executives mismanage their time and why sugarcane farmers are smarter after harvest than before Once we start thinking in terms of scar. There is no scarcity of books about the brain and psychology and emotion In fact the shelves are groaning with them But here s a psychological take on what you might regard as a problem of economics and that makes it genuinely fascinating So it s a shame that it doesn t work better as a book but this is one of those titles that you will want to read despite thatThe authors Sendhil Mullainathan and Eldar Shafir look at the nature of scarcity and crucially the effect it has on human performance You might hear the term and think it s about going hungry and that is one example of scarcity but they also look at what happens when money time and even friends are in short supply Although they aren t exact analogues all have related impacts on us as human beingsBy referencing the best available studies and doing a few of their own the authors come to some important conclusions Scarcity isn t all bad It concentrates the mind gives us focus But there is a price to pay for being in that tunnel It means that other essential aspects of life get ignored And most strikingly what the authors call bandwidth a combination of cognitive ability and ability to concentrate is reduced They call this a bandwidth tax So far so engaging We aren t just offered the symptoms and diagnosis but also some attempts to counter this Pointing out for instance that it s better for people to make decisions and learn things when they are going through a good phase than through scarcity However I have two problems with this as a book One is that while it s no textbook it really isn t particularly readable it takes a really interesting subject and makes it a bit dull And the other is that there are strong signs that this is really a magazine article not a book For page after page the same thing is said in subtly different ways If I see the word bandwidth again today I ll scream The meat of this book could easily fit in 4000 wordsSo paradoxically I do urge you to read the book as the subject is well worth exploring but I can t promise that you will enjoy the experience

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Characters Í Scarcity Why Having Too Little Means So Much 107 A surprising and intriguing examination of how scarcity and our flawed responses to it shapes our lives our society and our culture Why do successful people get things done at the last minute Why does poverty persist Why do organizations get stuck firefighting Why do the lonely find it hard to make friends These uestions seem unconnected yet Sendhil Mullainathan and Eldar Shafir show that they are all examples of a mind set produced by scarcityDrawing on cutting edge research from behavioral science and econo. I once heard Sendhil Mullainathan speak at an event in DC and he was smart and engaging He s a MacArthur Foundation genius a Harvard economist and a TED speaker He has a wry sense of humor and tells anecdotes from his personal life to make his economics work come alive And all of that is in this book written with his long time collaborator Eldar Shafir who s a Princeton psychologistStill this book was a bit of a disappointment possibly because I expected so much A lot of the conclusions are well obvious The book s entire thesis can be summarized as People make bad decisions when they are resource constrained whether the resources in uestion are money time food or something else Some of it recaps what has been said before about hyperbolic discounting in economicsThe book s chapters go like thisIntro definition of scarcity and overview of its conseuencesChap 1 The good scarcity can cause focus The bad focus can mean inattention to other thingsChap 2 Scarcity causes an internal disruption that makes it harder to make good decisionsChap 3 Slack the opposite of scarcity allows better choices and reduces the bad conseuences of failiureChap 4 Poor people are sometimes realistic about estimating costs because they have to beChap 5 Borrowing when you re short of cash leads to a descending spiral of debtChap 6 7 Poverty is a vicious circle of scarcity leading to bad decisions leading to scarcityChap 8 Poverty can be alleviated by creating slack such as extra cash or day care to create timeChap 9 Efficient use of resources and division of labor helps organizations become efficientChap 10 Efficient use of self control helps with life issuesOn the positive side the book contains some interesting stories and a rich set of endnotes to track down the many studies the authors cite On the negative side the book keeps talking about how mainstream economics is traditionally for example that people are rational decision makers just so the authors can tear down the mainstream view Economists come across as completely clueless which maybe they are Is it really surprising that when you re poor hungry and stressed that you would make less than rational decisionsMullainathan and Shafir seem aware of this problem with the book Chap 2 contains some defensive passages about how bad decisions under scarcity are different from bad decisions due to stress The explanation isn t compelling and unlike most of their other claims that passage doesn t have lots of studies to back it upThe most interesting study in the book is one about street vendors in India who are in perpetual debt from a loan sell repay cycle Chap 6 The researchers give the vendors a cash grant to pay off their debts which should have allowed them to start saving a little and eventually eliminate the need for borrowing altogether One by one though the vendors fall back into debt Any non economist would see this as challenges of personality or habit It s the same reason why couch potatos find it hard to get off the couch and exercise everyday The authors though somehow turn this into a story of scarcity How it was because there wasn t enough slack Why don t they do an experiment where they give everyone a little extra cash to save They don t though and I d bet good money that with additional cash the vendors would still have fallen back into debt eventually What the vendors need is some training and hand holdingThis study illustrates one of the biggest problems with the book In order to make a case for the centrality of scarcity the authors go too far Not every bad decision is about scarcity Sometimes people are dumb and sometimes there are dumb people And sometimes people are smart and there are also smart people At one point the authors write all people if they were poor would have less effective bandwidth Not sure about that My grandmother managed seven kids and ran a shop but she was dirt poor until her children grew up