A study on scarcity: How having too little time affects cognitive abilities

Abstract

Previous research has shown that people, when under conditions of scarcity, perform worse on cognitive tasks. This study looks at the problem of time scarcity and how time scarcity affects a person’s ability to do simple computations. To investigate this effect, 53 Princeton University undergraduates completed a word identification task and an algebra task under conditions of time scarcity or under control conditions. The results showed that participants answered more algebra problems correctly when under a condition of time scarcity as compared to their control counterparts. Possible mechanisms explaining this result and applications of this study to financial firm behavior are discussed. Limitations and further applications are discussed as well.