Why You Make Worse Decisions When You Want Something

The ache of not having "enough" affects our intelligence and decision making. Here's how to fix it.

By Rosie Ifould from Psychologies Magazine
Also published in Reader's Digest Magazine April 2014

piggy bankTravis Rathbone for Reader’s Digest

Why Dieting Makes You Feel Dumb
It’s day three of your diet, and you are fixated on the snack in your drawer. You need to call your child’s teacher, but you’re having trouble 
recalling her name. Then a client phones to ask why you’ve sent 
confidential information in an e-mail that could be read by anyone. Don’t underestimate the scarcity mind-set: Your obsession with what you can and can’t eat has captured your cognitive abilities. In one study, dieters could quickly pick out the word donut in a word search but took 30 percent longer to find the word cloud.

Fluid intelligence, cognitive capacity, and executive control all come under what Shafir and Mullainathan term mental “bandwidth,” and even the slightest suggestion of scarcity taxes our ability to reason properly, control our impulses, and think clearly.

Why You Don’t Save Enough
In the short term, if you’re strapped for cash, you probably manage a dollar pretty well. People in poverty have been shown to be better at assessing something’s worth and more astute about bargains. Long-term decision making suffers under scarcity-inspired tunnel vision, however. “You may be less likely to attend to the financial repercussions of taking a payday loan, or you may plan less carefully for the next month, because you need the money for immediate concerns,” says Shafir. Even fear of financial scarcity can affect the ability to reason: In one study, after a group of students read about a hypothetical situation where they had to pay a big bill, they did significantly worse on an IQ test. “A trickle of scarcity, and they looked less intelligent,” say the authors.

Why the Lonely Can Read Your Face
People who report feeling lonely are often better at interpreting emotions in photographs than those with active social lives. “You might have thought they’d do worse—after all, their loneliness might imply social ineptitude,” Shafir and Mullainathan write. But scarcity doesn’t mean you lack skill. In fact, this superior performance makes sense when you consider that the lonely focus on their own form of scarcity—making social contacts.
 
Why You’re Most Productive on Deadline
Scarcity does have an upside, and it explains why successful people 
often get things done at the last minute. “When scarcity captures 
the mind, we become more attentive and efficient,” write Shafir and 
Mullainathan. With the mind riveted on the task at hand, we are less prone to careless errors and more open to flashes of inspiration. This 
is called the focus dividend. But we need to be careful that the 
personal concerns that make for a balanced life—like my playdate with my son—don’t fall by the wayside during these great leaps of progress.

More Ways to get More From Less
First understand how scarcity changes our thinking. Then employ these strategies to reap the benefits—and avoid the pitfalls.

  • Set up fail-safes. When scarcity forces us to tunnel our vision on 
a single thing, we don’t see other important tasks. So create backups: Set up an e-calendar to alert you to important dates, for instance, and hire a trainer or enlist a friend who will make sure you don’t neglect exercise.
  • Eliminate the Need for constant vigilance. If you’re dieting and thinking about food all the time, it’s hard to endlessly say no to 
junk food in your home. Throw it all out in one go so you won’t have to make the right (i.e., harder) choice again and again. Likewise, it requires concentration to remember to pay all your bills, but it’s simple and free 
to sign up for automatic recurring payments.
  • MAKE DEADLINES YOUR FRIEND. Set strict deadlines for important tasks to increase productivity and even make yourself more inspired. We tend to be lenient with ourselves when our deadlines are self-imposed, so it helps to have someone else enforce them.