This is a Lexicon entry: the mechanism, when it shows up, and the countermeasure. The full correction, with real-world cases and the audit prompt, hasn't been written yet.
Definition
The hidden cognitive cost of scarcity: constantly managing limited resources consumes so much mental bandwidth that it crowds out the forward-thinking, planning and impulse control needed to escape the scarce condition. Poverty is not merely a material problem but a cognitive one - the mental load of managing shortfall impairs IQ-test performance and makes the very behaviours that could alleviate poverty harder to sustain. Being poor is expensive in ways that go far beyond money.
When it shows up
Poverty, chronic illness, caregiving, ongoing crisis. Any condition that consumes cognitive resources continuously regardless of current task.
Failure mode
Chronic worry about resource scarcity reduces available cognitive capacity for other tasks. Decisions made under bandwidth tax are systematically worse across the board. It looks like poor judgment; it is depleted capacity.
Countermeasure
Reduce the constant-worry surface through structural intervention (not willpower): automatic savings, scheduled calendar items for constants, outsourcing logistical load. Every removed constant frees bandwidth for the high-impact decisions.
Related traps
Also connected in the map4 more, locked
Credit & first seen
DiscoveredDocumented by Sendhil Mullainathan and Eldar Shafir in Scarcity: Why Having Too Little Means So Much (2013); discussed by Gurwinder Bhogal,40 Useful Concepts(Spring 2023, https://gurwinder.blog/p/40-mind-expanding-concepts-spring).
Also revealed
Entry #87 of 631 in The Lexicon · see the full Lexicon