Ferdowsi University of Mashhad Journal of Social Sciences

Why Do the Poor Sometimes Display Unusual Behavior? The Cognitive Impact of Scarcity on Economic Decisions of the Poor: A Systematic Review of Experimental Studies (2012-2024)

Document Type : Review article

Authors

Zahra Khodadoust 1
Seyed Saeed Malek Sadati 2
Seyed Mohammad Javad Razmi 3
Mehdi Feizi 2

1 PhD candidate in Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

2 Assistant Professor of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

3 Professor of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

https://doi.org/10.22067/social.2025.93131.1633
Abstract
Despite the growing development of cognitive studies, cognitive sciences remain overlooked in Iran, particularly among economists unfamiliar with experimental design. A review of experimental studies in cognitive economics could serve as a valuable resource for researchers. This systematic review examines how poverty and scarcity influence economic behaviors via cognitive mechanisms. Through comprehensive searches in Google Scholar, Science Direct, Scopus, and Web of Knowledge databases using keywords including "scarcity", "decision making", "economic preferences", "cognitive performance", "poverty", "working memory", "inhibitory control", "executive function" and "cognitive load", 26 English-language articles were selected and systematically reviewed in multiple stages according to inclusion and exclusion criteria. The report adheres to the PRISMA 2020 guidelines. According to the findings, over 90% of the studies demonstrate heightened temporal discounting under scarcity. The results on the mechanisms of action are not conclusive: 60% of studies reported diminished risk-taking, 20% observed increased risk aversion, and the remaining 20% found no significant association. Anxiety and stress induced by scarcity correlate with diminished risk tolerance; however, establishing clear causal relationships or identifying specific mediating roles requires more rigorous statistical analysis. The results on consumer decision-making suggest attenuation of ownership bias, framing effects, and illusory causation, but amplification of scarcity-induced bias. Given the complex nature of poverty and its impact on decision-making, the importance of controlling for confounding factors, along with differences in the assessment of cognitive variables, a more precise statement about the effect of poverty on economic decisions and its mechanisms warrants more innovative research, especially using the brain mapping technique.
 
 
 
 

Keywords

Experimental Economics
Decision Making
Cognitive Performance
Scarcity
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  • Receive Date 23 April 2025
  • Revise Date 07 May 2025
  • Accept Date 12 May 2025
  • First Publish Date 12 May 2025
  • Publish Date 23 August 2025

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