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Authors: Sendhil Mullainathan,Eldar Sharif

Tags: #Economics, #Economics - Behavioural Economics, #Psychology

Scarcity: Why Having Too Little Means So Much (6 page)

BOOK: Scarcity: Why Having Too Little Means So Much
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2
The Bandwidth Tax

Here are three vignettes about scarcity that illustrate a different consequence of focusing:

One of your biggest clients has informed you that it will be taking its business elsewhere. You convince the account manager to listen to one last pitch. She agrees but says it must take place tomorrow. You cancel all your meetings and put off all your other tasks. You pour all your time into the pitch. One appointment, though, cannot be avoided. Your daughter has her city championship softball game tonight. For a moment you even consider skipping that, but your better side (barely) wins out: surely her pitches feel as important to her as your sales pitch feels to you. On the way to the game, your daughter realizes she forgot her lucky charm. You snap at her before turning around to pick it up. By the time you have regained your composure, it’s too late. She was already nervous for the game and now you’ve made her more nervous. Something fun has become tension filled. At the game, you can’t enjoy yourself. Your mind keeps
turning to that presentation. Not that you can work on it now—you just can’t focus on the game. You’re distracted, and when your daughter occasionally catches a glimpse of you, you know she knows it. Lucky for you, her team wins and the jubilation helps cover your mistakes. But certainly your performance that evening would not put you in any parenting Hall of Fame.

John has an exam tomorrow. He is putting himself through college. Though his parents saved for all their kids’ education, they did not save enough. They never dreamed that tuition would rise so much. John is the youngest of four kids, and by the time his turn came around, the college fund was meager and tuition was even higher. Still, he chose to go to a more prestigious but more expensive college. If he was going to invest in a college degree, he reasoned, he might as well invest in the one that would be worth the most. He patched together student loans, the college’s financial aid, and scholarships. It was messy, but somehow he made it work. It always seemed like a good choice. Until now. Two scholarships that were to be automatically renewed have suddenly evaporated; the foundations that award them were hit hard by the recession and were forced to cut back. How would he make tuition for next semester? The payment was due in less than a month. Would the bank give him another student loan? Could he afford it? He could borrow from his aunt and uncle; his father would hate it but did he have a choice? Should he just transfer to the local college? John just can’t focus. He keeps thinking about what to do. Preoccupied, he misses a study group meeting that he wanted—needed—to attend. This is no time to take the exam, but he has no choice. When the day arrives, he tries to focus, but his mind keeps going elsewhere. He misses some easy questions and is doubly upset at the end of the day. Not only is he struggling with tuition; he is annoyed at his abysmal performance on the exam.

A manager of a fast-food burger shop laments his trouble with his (low-wage) employees. “They are just so unreliable,” he says. He
complains that most of his time is spent cajoling them into behaving better with the customers. “Customer service means just that,” he tells them. “Put on a smile. Be friendly. When the customer talks to you, make small talk. When the customer is a jerk, don’t get snippy. It’s your job to be polite.” The rest of his time is spent dealing with careless mistakes. “When someone says they want medium fries, how hard is it to press the button that says ‘fries’?” he asks incredulously. He is clearly frustrated with his workers. “Maybe it’s that they just don’t care. Maybe it’s the education in this country. Maybe it’s the way they were raised,” he says.

These vignettes illustrate different consequences of scarcity capturing attention. In the previous chapter, we saw how tunneling distorts the trade-offs we make. Trying to focus on making ends meet right now, we fail to consider the impact in the future of raising the insurance deductible. In the vignettes above, in contrast, we catch people as they are trying to focus on something unrelated to their immediate scarcity. We catch the harried executive not when she is putting together her sales pitch but when she is a parent. We catch the student not when he is dealing with making ends meet but when he is trying to focus on his exam. We catch the low-income worker not when she is at home managing her finances but when she is at work serving food.

These anecdotes illustrate a central hypothesis: because the focus on scarcity is involuntary, and because it captures our attention, it impedes our ability to focus on other things. The executive is trying to focus on her daughter’s baseball game, but scarcity keeps pulling her mind away. Even when we try to do something else, the tunnel of scarcity keeps drawing us in. Scarcity in one walk of life means we have less attention, less mind, in the rest of life.

The concept of
less mind
is well studied by psychologists. Though careful research in psychology employs several fine distinctions to capture this idea, we will use
the single umbrella term
bandwidth
to cover them all. Bandwidth measures our computational capacity,
our ability to pay attention, to make good decisions, to stick with our plans, and to resist temptations. Bandwidth correlates with everything from intelligence and SAT performance to impulse control and success on diets. This chapter makes a bold claim. By constantly drawing us back into the tunnel, scarcity taxes our bandwidth and, as a result, inhibits our most fundamental capacities.

IT’S LOUD IN HERE

Imagine sitting in an office located near the railroad tracks. Trains rattle by several times an hour. They are not deafening. They do not disrupt conversation. In principle they are not loud enough to prevent you from working. But, of course, they do. As you try to concentrate, the rattle of each train pulls you away from what you were doing. The interruption itself is brief, but its effect lasts longer. You need time to refocus, to collect your thoughts. Worse, just when you have settled back in, another train rattles by.

This description mirrors
the conditions of a school in New Haven
that was located next to a noisy railroad line. To measure the impact of this noise on academic performance, two researchers noted that only one side of the school faced the tracks, so the students in classrooms on that side were particularly exposed to the noise but were otherwise similar to their fellow students. They found a striking difference between the two sides of the school. Sixth graders on the train side were a full year behind their counterparts on the quieter side. Further evidence came when the city, prompted by this study, installed noise pads. The researchers found that this erased the difference: now students on both sides of the building performed at the same level. A whole host of subsequent studies have shown that noise can hurt concentration and performance. Even if the impact of noise does not surprise you, the size of the impact (a full school year level at sixth grade) should. In fact, these results mirror many laboratory studies that have documented
the powerful effects of even slight distraction.

Now picture yourself working in a pleasant, quiet office: no disruptions,
no trains. Instead, you are struggling with your mortgage and the fact that freelance work is hard to come by. Your spouse and you are living a two-earner life with only one and a quarter earners. You sit down to focus on your work. Soon your mind is wandering.
Should we sell the second car? Should we take another loan?
Suddenly, that quiet office is not so quiet anymore. These noisy trains of thought are every bit as hard to ignore. They arrive at even greater regularity and are every bit as uninvited. But these trains pull you on board.
Should we sell the second car?
leads to
That would raise some money, but it would make the logistics so much harder, just when I need to be working as hard as I can. We don’t want to risk the one steady job we do have
. You can ride these trains of thought for some time before you break free and return to focusing on your task. Though this room seems quiet, it is full of disruptions—disruptions that come from within.

This is how scarcity taxes bandwidth. The things that distract us, that occupy our mind, need not come from outside us. We often generate them for ourselves, and these distractions can disrupt our attention more than a physical train. These trains of thought rumble with personal relevance. The mortgage distraction lingers because it matters. It is not a passing nuisance but an intensely personal concern. It is a distraction precisely because it causes us to tunnel. The persistent concern pulls at the mind, drawing us in. Just like an external noise that distracts us from thinking clearly, scarcity generates
internal
disruption.

The notion of an “internal disruption” is commonplace in the cognitive sciences and in neuroscience. A great many studies have documented the profound impact of internal thoughts—even something as trivial as rehearsing a sequence of numbers in your head—on general cognitive function. And years of lab studies compounded by fMRI evidence have taught us about the way the brain focuses and is disrupted. One common distinction is between “top-down” processing, where the mind is directed by our conscious choice of what to focus on, and “bottom-up” processing, where attention is captured by one stimulus or another in ways that we find hard to control.
We saw this in the introduction, when food-related words captured the attention of the hungry. You know the feeling well, from any time a quick movement or sound captured your attention away from what you were doing. A particularly noteworthy form of distraction, one that requires no external distractors at all, is mind wandering. Without our realizing it, the brain’s resting state—the default network—tends to pull us away from what we are doing. True to its name, this happens without our conscious input, when our mind “wanders.” So while we are often able to direct our brain’s activity, at other times we lose that control. For the kids in the school near the trains, the ability to remain focused in the presence of bottom-up distractors depends also on how much work the brain is doing, on how “loaded” it is.
Behavioral and neuroimaging studies
have shown that distraction along with brain activity related to the presence of distractors increase when the load is high. Top-down attention cannot prevent bottom-up intrusions. When someone says your name across the room at a party, your attention shifts no matter how intently you are trying to focus on something else.

Scarcity itself also captures attention via a bottom-up process. This is what we mean when we say it is involuntary, happening below conscious control. As a result, scarcity, too—like trains or sudden noises—can pull us away even when we are trying to focus elsewhere.

An early study tested this idea by giving subjects a simple enough task:
push a button when you see a red dot on the screen
. Sometimes, just before the dot appeared, another picture would flash on the screen. For nondieters, this picture had no effect on whether people saw the dot. For dieters, in contrast, something interesting happened. They were less likely to see the red dot if they had just seen a picture of food. Flashing a picture of a cake, for example, reduced dieters’ chance of seeing the red dot immediately afterward: it was as if the cake had blinded them. This happened only with pictures of food; nonfood pictures had no effect. Of course the dieters were not physically blinded; they were just mentally distracted. Psychologists call this an
attentional blink.
The food picture, now gone,
had made them mentally blink. When the dot appeared, their minds were elsewhere, still thinking about the food. All of this happened in a fraction of a second, too quick to control. Too quick to even be aware of. The title of the study says it best: “All I Saw Was the Cake.”

The attentional blink occurs briefly. The distracting effects of scarcity, we conjectured, would last significantly longer. To test this, we ran a study with the psychologist Chris Bryan, in which
we gave subjects word searches
such as this one:

WORD SEARCH

Subjects searched for the highlighted word (
STREET
in this case). When they found and clicked it, a new grid appeared and they would look for the next word. A second group of subjects was given the same task but with slightly different words. For example:

WORD SEARCH

BOOK: Scarcity: Why Having Too Little Means So Much
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