March 21, 2018
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Study: When resources are scarce, most people forfeit the future

By Mark Roth, Pittsburgh Post-Gazette

Poor people are often criticized for self-defeating behaviors, from taking out high-interest payday loans as a way of getting through the week, to not putting aside money for the future.
But a new study published today in Science magazine suggests that most of us are likely to behave that way when we are faced with a shortage of resources.
Experiments put college students in “rich” and “poor” groups as they played a series of games. Students in the “poor” groups were given less time or fewer chances to win at the games than those in the “rich” groups.
The result? “Poor” students focused much more intensely on the immediate task at hand, and they were more likely to take out “loans” of time or chances to keep playing a game, even though it depleted their resources for future rounds.
Anuj Shah, a behavioral science professor at the University of Chicago, said the experiments, by researchers at his school and Harvard and Princeton universities, had students play versions of Wheel of Fortune, Angry Birds and Family Feud.
There were two primary results. First, they demonstrated that short-sighted behavior is not unique to poor people.
“It’s kind of striking that when you take people from the Princeton University community and put them in a situation where there is a shortfall of resources, they behave just like people who have been out of work for some time,” he said. “Is it something about being poor? Or is it something about being in a situation of scarcity?”
The other lesson is that these behaviors don’t just occur when money is tight.
Among middle-class people, another common example of scarcity is time.
“When people are facing a deadline, they become much more focused on that task, and they may even ‘borrow’ by asking for an extension, which means they might end up leaving themselves less time for future tasks,” he said.
In the Wheel of Fortune game, “poor” students got six guesses per round to try to guess the words making up a phrase, while “rich” students got 20 guesses per round. As the “poor” students focused on making the most of their fewer choices, they also used up more energy.
In a subsequent game where students had to press different keys when they saw dots on a computer screen, the “poor” students performed significantly worse than the “rich” ones.
A real-world example of this issue might be the criticism low-income mothers sometimes face for not investing in their children’s futures by reading to them, Mr. Shah said.
“Here’s a parent who may be managing many different demands, working two jobs or taking several buses to get to work, and so reading to your kid is something that’s hard to do when you’re very tired and fatigued. It’s not necessarily about not being oriented to the child’s future, but just that you’re tired.”
When the students played versions of Angry Birds, a computer game where players use a slingshot to fire birds at targets, and Family Feud, where they try to guess the most popular answers to certain statements, they were sometimes allowed to borrow shots or numbers of guesses from future rounds, and in some cases, they had to pay steep “interest” by borrowing two shots from the future to get one in the present, for instance.
Not only did “poor” students borrow more often, but they performed worse when they did so, Mr. Shah said, and they often borrowed proportionately more as the game went on — not very different from a person taking out a second payday loan to pay off the first one.

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