Scarcity Effect and Consumer Decision Biases: How Urgency Influences the Perceived Value of Products

Abstract

The scarcity effect, a psychological phenomenon where consumers perceive limited-availability products as more valuable, significantly shapes purchasing behavior, especially when combined with urgency-inducing tactics. This paper explores how scarcity, amplified by urgency, influences cognitive biases—such as loss aversion, anchoring, and the scarcity heuristic—in consumer decision-making processes. Through an in-depth analysis, we examine how urgency-driven scarcity enhances consumers’ perceived value of products, often leading to impulsive purchasing and altered judgment. The study also assesses the implications of these tactics in marketing strategies, revealing potential short-term gains in sales alongside long-term impacts on consumer loyalty, brand trust, and post-purchase regret. By providing insights into the psychological mechanisms behind scarcity and urgency, this paper underscores the importance of balanced, ethical marketing practices that respect consumer autonomy. The findings highlight the need for brands to employ scarcity tactics strategically, ensuring that they enhance perceived value without compromising long-term customer relationships.