How dose financial scarcity lead to changes in time preferences? An examination of the effects of working memory in a laboratory experiment

Document Type : Research

Authors

Zahra Khodadoust ¹

Seyed Mohammad Javad Razmi ²

Seyed Saeed Malek Sadati ²

Mehdi Feizi ²

¹ Ferdowsi university of Mashhad

² Department ofAdministrative and Economic sciences, Ferdowsi university of Mashhad

https://doi.org/10.22067/social.2026.97446.1729

Abstract

Financial scarcity and its impact on economic behavior, as well as the mechanisms underlying this influence, have attracted considerable scholarly attention over the past decade. Empirical evidence indicates that intertemporal choices are altered under conditions of scarcity, and that cognitive performance together with ancillary factors such as stress and negative affect mediate this effect. The present study hypothesizes that scarcity impairs working memory, and that this impairment, in turn, influences individuals’ intertemporal decisions. This hypothesis was examined using a between‑subjects laboratory experiment. Eighty students from Ferdowsi University of Mashhad participated, receiving real monetary rewards contingent on their financial choices. The results demonstrate that financial scarcity significantly weakens working‑memory performance; consequently, participants in the scarcity condition are more likely to prefer smaller, immediate rewards over larger, delayed ones. Secondary analyses reveal that a model incorporating the mediating role of working memory accounts for variations in economic decision‑making more effectively than a model relying solely on the direct effects of scarcity.

Keywords

Decision Making

Lab Experiment

Scarcity

Time Discounting

Working Memory

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