Scarcity bias - Hotel booking sites told to change | tutor2u Economics
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Scarcity bias - Hotel booking sites told to change

Humans have a strong scarcity bias. We unconsciously assume things that are scarce are valuable and things that are relatively abundant are not. The scarcity bias impulse frequently kicks in when we are told that a product such as a ticket to a sports event or a desired hotel room is in short supply and we might miss a great deal unless we book/pay now!

We are alert to messages that something is on a time limited offer. Many businesses make strategic use of scarcity bias to prompt us to make a purchase even when w might be better off engaging system two thinking and allowing more time to search for better deals.

Even those of us who have used these booking sites for years are still prone to the effects of scarcity bias. The impact might level off a little, but there is still a friction cost to overcome by giving up time and energy searching further for a better deal. Booking.com uses most of the behavioural tricks in the manual to accumulate orders. If it didn't work, they wouldn't do it!

Now the Competition and Markets Authority - the UK's main competition watchdog has instructed hotel booking sites such as Booking.com to end 'misleading' sales. It will be interesting to see just what material changes are made to the design (or choice architecture) of these booking websites.

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