Are scarce products always more attractive? The interaction of different types of scarcity signals with products' suitability for conspicuous consumption

Abstract

This study examines the effects of two types of scarcity on the attitudes of consumers toward products. We consider scarcity due to supply (e.g., "limited edition") and scarcity due to demand (e.g., "only a few units remain"). The data obtained from two surveys show that the appearance of a positive scarcity effect depends on the product's suitability for conspicuous consumption. If a product is used for conspicuous consumption, signals of scarcity due to limited supply are advantageous compared to signals of scarcity due to high demand. On the contrary, if a product is not used for conspicuous consumption, signals of scarcity due to high demand result in more favorable product evaluations.