Post summary

• Everyone knows everything is fine in moderation. But why are we all so bad at it? The Scarcity Loop explains why.
• It's the ultimate driver of bad habits.
• Getting rid of bad habits moves your life forward more than adding good new habits does.
• You’ll Learn: How the scarcity loop affects you, how it works, its ancient origins, and how to get out of it.

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Last week, I had a few fun media drop-ins to talk about my new book, Scarcity Brain, published last Tuesday.

Many podcast and TV hosts asked me about the Scarcity Loop, which is one key revelation of the book. The scarcity loop is now woven into daily life and often pushes us into bad habits.

To understand the Scarcity Loop, consider some bad habit in your life that you do over and over. We all have one of these.

Here are a few common examples:

• Eating more when you’ve had enough.
• Buying stuff you don’t need (think quick Amazon Prime purchases or limited-time sale items).
• Scrolling Instagram, Facebook, TikTok, Twitter, etc.
• Going down seemingly bottomless informational rabbit holes (e.g., Getting obsessive about a news story, obsessively Googling some mild symptom you have and convincing yourself it’s stage-4 cancer).
• Checking and rechecking some number like your stock portfolio, fantasy football scores, or sports bets.
• Playing mobile games like Candy Crush for way too long.

I spent years traveling the world, reading books and studies, and speaking with experts to understand why people get hooked on behaviors like that: behaviors that are fun in the short term but detrimental in the long run.

The scarcity loop powers many of these behaviors. It’s a three-part behavior loop that is unparalleled at pushing us into behaviors we do over and over and often later regret.

The loop seems to have evolved naturally in the human brain to compel our ancestors to repeat behaviors that kept them alive, like finding food.

But in the modern world, the scarcity loop often works against us. It’s the serial killer of moderation.

Here’s a video my publisher made to help you understand its role in technology:

How the scarcity loop works

In short

The scarcity loop has three parts: opportunity, unpredictable rewards, and quick repeatability. Becoming aware of it can help you fall into it less often.

The details

I discovered the scarcity loop when I visited a new, cutting-edge casino in Las Vegas. It was a sort of twilight zone of casinos.

Every other casino in town will do anything they can to get you in the door. But at this one, the public isn’t welcome. That’s because the place is a living, breathing casino lab used entirely for human behavior research.

To understand the scarcity loop’s three parts, picture a slot machine. It offers:

1. Opportunity: We have an opportunity to get something of value. In the case of a slot machine, it’s money.
2. Unpredictable rewards: We don’t know when we’ll get the thing of value or how valuable it’ll be. Any given slot machine game could get you nothing, a few quarters, or a life-changing amount of money.
3. Quick repeatability: We can quickly repeat the behavior. The average slot machine player plays 16 games a minute, which is about as much as we blink.

When casinos embedded the scarcity loop in slot machines in 1980, slot machines exploded in popularity.

• Slot revenues quickly increased 10-fold.
• Slot machines went from being ignored by the gambling industry to taking up 85 percent of casino floors.
• We now spend more money on slot machines than we do on movies, books, and music combined.

You may think this doesn’t matter to you because you don’t play slot machines. It does.

That three-part system didn’t stay in slot machines. Once other industries noticed its power, they began co-opting it.

The scarcity loop is now embedded in social media, dating apps, sports gambling, personal finance apps like Robinhood, streaming TV and YouTube, the information cycle, and mobile video games like CandyCrush. It’s even in the food system and much more.

The fix? Remember that we’re inherently attracted to the loop.

This means that all those bad habits I listed above aren’t necessarily your fault—it’s your ancient brain falling into a loop that used to keep you alive. But they are your problem to fix.

Scarcity Brain reveals more about the loop and three ways to get out of it (along with a lot of other health, mindset, and behavioral tactics).

The first way to get out of the scarcity loop is to become aware of it.

If you find yourself in the scarcity loop, recognize what’s happening. Ask yourself: What happened just before you fell into the loop?

Building awareness around a mindless behavior—what triggered it and why you’re doing it—makes us less likely to get sucked in. Or, at least, exit it faster.

Brown University scientists, for example, discovered that this type of intervention—paying attention to a bad repeat habit and why it happens—reduced mindless eating by 40 percent.

Once you know how the machine works, you can better decide if and how you want to use it.

A vital exercise: identify the scarcity loop

Where in your life have you found the scarcity loop impacting your behavior? Drop an observation in the comments section.

I’ll go first: Book rankings. Obviously, the first week of book sales is critical for authors. Publishers use it to gauge whether or not they’ll commission the author to write another book.

Publishers and authors can track down-to-the-moment metrics about their books. Amazon, for example, offers authors a special page where they can see exactly where their book ranks right now.

1. Opportunity: Book sales.
2. Unpredictable rewards: A constantly changing number—each time I check, the ranking could have gone down a little or a lot (bad or very bad). Or it could have gone up a lot or a little (win or … jackpot).
3. Quick repeatability: The ranking updates frequently over the day, so I can check and re-check.

With The Comfort Crisis, I checked that damn author page WAY TOO much. I was like a rat in a study hitting a lever for a treat.

But now that I understand the underlying mechanics of the scarcity loop, I know why I’m so compelled to check my book’s rankings. So I don’t as often.

Because here’s the thing: I don’t write books to get a ranking on Amazon.

I write books to help people. Amazon rankings can’t capture the impact a book has on any one person.

I’ve already had people email me about how Scarcity Brain has helped them.

• It helped a father better understand his son’s drug addiction.
• It helped a woman understand why she buys too much crap online, and stop buying.
• It helped another understand why her fitness tracker was sucking the soul out of her exercise routine.
• It helped another understand the roots of mindless eating and take some simple steps to quit it.

I’ll take one message like that over a sales rank forever and always.

That’s the tense of living we’re after.

Have fun, don’t die, observe the loop and exit the loop.

-Michael

P.S., We can also use the loop to build good habits. The book dives into that and we’ll likely cover it in a future newsletter.

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