The Effect of Scarcity Mindset on Risky Economic Decision-making
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2021-07-01
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en
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Abstract
Within economics, there are several explanations for the influence of poverty on risky
behaviors. This psychological research investigated how the feeling of not having enough, or
scarcity mindset, affects risky economic decision-making. A between-subjects experiment (N
= 126) was conducted to investigate the effect of scarcity and abundance mindset on risky
decision-making. The experiment was designed so that the mindsets elicited spill over to the
risky decision task to avoid manipulating the level of wealth of the participants, which is an
important confounding effect. The result showed that people induced with a scarcity mindset
follow the prediction of expected value less than people in an abundance mindset, indicating
poorer risky economic decision-making. This finding supports previous literature on the
effect of poverty and opens new directions for future research.
Keywords: scarcity, abundance, mindset, risky, economic decision-making, poverty
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Faculteit der Sociale Wetenschappen