In Shenzhen, China, people ride bicycles almost for free because bicycle sharing companies such as Ofo (yellow) and Mobike (orange) compete each other aggressively.
Thanks to the competition, renting and returning bicycles is extremely convenient. When I subscribed Mobike, I could use app to search for available bicycles nearby. When I met a lonely bicycle on a street, I simply scanned its QR code to unlock and ride it. When I finished my trip, I parked it anywhere I wanted and then scanned its QR code one more time.
Certainly, aggressive competition raises numerous problems. For instance, some bicycles are broken, others are dirty, and the others are even dumped out in the woods! However, competition solves a challenging problem that other bicycle friendly cities failed to address, that is, bicycle theft. Since bicycles are for free in this city, no one is interested in owning or stealing them. A sharing economy, when it truly comes true, could change how we value a product or service.
Psychologists have long claimed that people do not know the value of a product or a service. Instead, people shape their preferences on the spot. For instance, when Ariely, Loewenstein and Prelec asked 146 U.C. Berkeley undergraduate students whether they wanted to attend a free poetry recitation, the percentage of respondents willing to attend the free poetry recitation was 35% when they had first been asked if they would pay to attend the recital, but only 8% when they had first been asked whether they would attend the recital in exchange for pay. As written in the Mark Twain’s novel Tom Sawyer, Tom “had discovered a great law of human action, without knowing it—namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.”
This paper challenges the common assumption that economic agents know their tastes. After reviewing previous research showing that valuation of ordinary products and experiences can be manipulated by non-normative cues, we present three studies showing that in some cases people do not have a pre-existing sense of whether an experience is good or bad-even when they have experienced a sample of it.
One thought on “How can we avoid bike theft?”
“Scarcity determines value”
Initially, I thought solutions to bike theft would involve increasing storage facilities, improving security measures, or raising public awareness. However, the post explained that in China, intense competition among bike-sharing companies has made bike usage nearly free, leading to a lack of interest in stealing bikes. This approach of eliminating scarcity to prevent theft was innovative.
This post reminded me of a case involving the owner of a boarding house. The boarding house provided rice, kimchi, and ramen. Initially, the owner stocked about 10 packets of ramen. But they would quickly disappear as users hoarded them in their rooms. To address this, the owner started stocking the ramen more abundantly and kept refilling it as it was used. Initially, a lot of ramen was taken, but eventually, those who had taken ramen to their rooms brought it back to the communal area. Users realized there was no need to hoard ramen in their rooms because it was always available. This illustrates how people’s desire for an item diminishes when they know it is always plentiful.
The post argues that people do not know the value of products or services. It cites the expression, “In order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.” It means the value of a product or service is determined by its scarcity. I agreed with this view because, despite being essential for life, water is easily accessible and therefore not considered as valuable as diamonds. Conversely, diamonds, which are primarily ornamental and not particularly useful, are valued more highly due to their rarity, leading people to pay more for them. But I also thought about how some things are valued because they are scarce, while others become popular because they are widely used and beloved by the public. Upon reflection, I realized that scarcity isn’t just about a lack of supply. A national item, beloved by many, is itself a rarity. Among many products, a particular one may stand out and become widely cherished, indicating a different type of scarcity—demand-related scarcity.
Because scarcity determines value, it is important to utilize it effectively in marketing. However, each type of scarcity should be approached differently depending on the target customers and marketing strategies. Supply-related scarcity appeals to customers who value uniqueness, while demand-related scarcity appeals to those who want to follow trends or be like others. Creating artificial scarcity without considering customer characteristics can damage consumer trust and brand image. Therefore, it is crucial to understand and leverage scarcity appropriately.
“The consumer is not born but made.” In other words, transforming someone into a consumer depends on the perceived value of a product or brand, and this value is measured by its scarcity. Therefore, to compel someone to purchase something, it needs to be made scarce in some ways, and to eliminate theft, just removed the scarcity. Scarcity has the power to change situations and drive people to act. Thus, it is crucial to properly understand and utilize scarcity.
“Scarcity determines value”
Initially, I thought solutions to bike theft would involve increasing storage facilities, improving security measures, or raising public awareness. However, the post explained that in China, intense competition among bike-sharing companies has made bike usage nearly free, leading to a lack of interest in stealing bikes. This approach of eliminating scarcity to prevent theft was innovative.
This post reminded me of a case involving the owner of a boarding house. The boarding house provided rice, kimchi, and ramen. Initially, the owner stocked about 10 packets of ramen. But they would quickly disappear as users hoarded them in their rooms. To address this, the owner started stocking the ramen more abundantly and kept refilling it as it was used. Initially, a lot of ramen was taken, but eventually, those who had taken ramen to their rooms brought it back to the communal area. Users realized there was no need to hoard ramen in their rooms because it was always available. This illustrates how people’s desire for an item diminishes when they know it is always plentiful.
The post argues that people do not know the value of products or services. It cites the expression, “In order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.” It means the value of a product or service is determined by its scarcity. I agreed with this view because, despite being essential for life, water is easily accessible and therefore not considered as valuable as diamonds. Conversely, diamonds, which are primarily ornamental and not particularly useful, are valued more highly due to their rarity, leading people to pay more for them. But I also thought about how some things are valued because they are scarce, while others become popular because they are widely used and beloved by the public. Upon reflection, I realized that scarcity isn’t just about a lack of supply. A national item, beloved by many, is itself a rarity. Among many products, a particular one may stand out and become widely cherished, indicating a different type of scarcity—demand-related scarcity.
Because scarcity determines value, it is important to utilize it effectively in marketing. However, each type of scarcity should be approached differently depending on the target customers and marketing strategies. Supply-related scarcity appeals to customers who value uniqueness, while demand-related scarcity appeals to those who want to follow trends or be like others. Creating artificial scarcity without considering customer characteristics can damage consumer trust and brand image. Therefore, it is crucial to understand and leverage scarcity appropriately.
“The consumer is not born but made.” In other words, transforming someone into a consumer depends on the perceived value of a product or brand, and this value is measured by its scarcity. Therefore, to compel someone to purchase something, it needs to be made scarce in some ways, and to eliminate theft, just removed the scarcity. Scarcity has the power to change situations and drive people to act. Thus, it is crucial to properly understand and utilize scarcity.