Lack of resources can result in increase in efficiency, and increase in efficiency can lead to wastage.

Hear me out.

Situation 1: When the limit to that resource is visible and evident, people tend to conserve.

• People use more water when using a shower instead of a bucket.
• People conserve gas while cooking if it comes in a cylinder rather than pipeline.
• People spend less when using cash to pay, as opposed to using credit card or UPI.

Any scarcity or limit to usage makes us use that resource more efficiently. In some instances, it compels citizens, neighbors, or co-workers to collaborate and share.

This is the Scarcity Principle that states that the perceived value of a resource increases as it becomes less available.

Situation 2: When a resource is in abundance, we tend to use more than required or we tend to waste it.

Sounds flimsy? Let me jargon it up for you. This phenomenon is often described in economics and psychology as a byproduct of low marginal cost. When the cost (whether in money, time, or effort) of using one more unit of a resource is near zero, the incentive to conserve it disappears.

• After filling up the fuel tank, we feel we can now drive till time ends.
• We accumulate thousands of blurry photos in our image gallery but don’t delete because we feel we have unlimited space on our phone.
• How many posts on LinkedIn and Reels on Instagram have you “saved”?
• Diners at a buffet frequently load their plates with more than they can physically eat.

This is the Jevons Paradox. It suggests that as technological progress increases the efficiency with which a resource is used (making it more abundant), the total consumption of that resource actually increases because it becomes so cheap and accessible.

We are essentially talking about the “Psychology of the Limit”. In marketing, these two concepts are the levers used to control Velocity (how fast people buy) and Volume (how much they consume).

Here is how you can apply them to your marketing campaigns:

1. Using the Scarcity Principle to Drive Conversion

Scarcity creates a mental shortcut for value. When the limit is visible, the brain stops asking “Do I need this?” and starts asking “Can I afford to lose this?”

• Visual Enumeration: Just like the gas cylinder vs. the pipeline, make the limit tangible. Instead of saying “Limited stock,” use “Only 4 units left”. This creates a physicality to the digital experience.

• The Bucket UX: In SaaS or subscription models, use “Usage Progress Bars.” For example, showing a user that they have used 80% of their monthly credits (the “visible bottom of the bucket”) can lead to high-value usage and a smoother upsell to the next tier.

• Tactical Friction: Sometimes, making a resource harder to get increases its perceived utility. Exclusive “waiting lists” or “invite-only” access uses artificial scarcity to turn a product into a status symbol. For example, Gmail and Clubhouse in their early stages created gated access.

2. Using Jevons Paradox to Drive Growth and Retention

Jevons Paradox is about Abundance Engineering. When you make a resource feel limitless, you change the user’s behavior from calculating to consuming.

• The “All-You-Can-Eat” Model (SaaS & Content): This is the Netflix or Spotify strategy. By removing the marginal cost of “one more song” or “one more show,” you encourage data hoarding behaviours. Users stop being selective and start saving content, which creates high switching costs. If I have 500 “saved” posts on a platform, I am less likely to leave it.

• Reducing “Payment Pain”: The earlier example of UPI/Credit Cards vs. Cash is a perfect application. By removing the physical visibility of money leaving the hand, the psychological marginal cost is lowered. In marketing, implementing “One-Click Buy” or “Auto-Refill” utilizes Jevons Paradox with the efficiency in the transaction leading to an increase in total consumption.

• Efficiency as a Trap: If you market a product as “Energy Efficient” (like an AC unit), Jevons Paradox suggests people will leave it on longer because it feels cheaper to run. You can market “Efficiency” not just as a saving, but as a license for the customer to use the product more often without guilt.

3. The “Hybrid” Strategy: The Freemium Loop

The most successful modern marketing strategies actually use both principles in a single loop:

1. Jevons Start: Give the user an “abundant” experience (Freemium) where they can hoard data, photos, or projects at zero marginal cost. This builds a habit of high consumption.

2. Scarcity Switch: Once the user is hooked on the abundance, introduce a Visible Limit (e.g., “Your storage is 90% full”).

3. The Result: The Scarcity Principle kicks in. Because they have hoarded so much value during the abundance phase, the perceived cost of losing that access is now massive, forcing a high-conversion upgrade.

Comparison for Strategy

The Scarcity Principle leverages the “visible bottom of the bucket” to drive immediate action. Conversely, the Jevons Paradox uses “frictionless abundance” to drive total consumption.

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A summary of the article also published on LinkedIn in March 2026. Link here.