End artificial scarcities to increase productivity

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Artificial scarcities imprison the modern human.

My colleagues and I realized this over beer: dry erase markers cost almost nothing, yet a lecture hall never contains functioning dry erase markers.

For the cost of a meal, each professor could buy a career-sized stockpile of dry erase markers and never be caught wanting ever again.

So, why don't we?

A de facto currency in most departments.

As a species, we reflexively view duplication as inefficient.

In reality, there are situations where duplication can be rational:

An artificial scarcity arises when the cost of duplication
is less than the lifetime opportunity cost of traveling with or to a good.

In the case of dry erase markers, leaving about three working dry erase markers labeled "DO NOT TAKE" in a lecture hall will eliminate the need to remember to bring your own for the duration of a semester.

Other artificial scarcities abound: scissors, pens, chapstick, power adapters, screwdrivers, printers, paper towels and more.

Read on for my list of artificial scarcities and tips for eliminating them.

The cost of travel; the cost of duplication

To determine whether or not you have an artificial scarcity, you first need to consider the cost of travel to or with that good; you then need to consider the cost of duplicating that good near points of use.

For example, what is the cost of packing up a laptop power adapter and carrying it with you versus the cost of having an extra adapter at the office?

[Because opportunity costs are involved, artificial scarcities are relative: what is artificially scarce to my wife may not be artificially scarce to me, and vice versa.]

The cost of travel

When you only have one copy of any item, you either have to remember to carry it with you, or pay a steeper transit cost to reach the item.

For example, the cost of traveling with the adapter combines the mental burden of remembering to take the adapter with the opportunity cost of time spent packing and unpacking and the space lost in your bag.

Suppose you spend a minute each day packing and unpacking the adapter. Within a year, you've lost about six hours to just packing and unpacking your adapter.

Or, consider a lone screwdriver kept in the basement workshop. If you have a lot of children's toys, you change a lot of batteries.

Each battery change now costs a round-trip to the basement.

The cost of duplication

The cost of duplication includes the nominal cost of buying a item.

But, there are other costs.

There is the opportunity cost of space--the value of the space lost to the duplicated item. Larger items have higher space costs.

There is also the one-off opportunity cost of time spent acquiring the duplicate item.

Returns to scale in duplication

Some items come with a reset cost.

Anything that has to be cleaned before reuse (like a baby bottle or a frying pan) has a reset cost.

It's often easier to reset these items in bulk instead of per-use.

It also allows you to shift the reset time from time of use to when your opportunity cost is lower.

In these cases, the per-unit cost of duplication decreases.

Most items are also cheaper to buy in bulk, further decreasing the cost of duplication.

Eliminating artificial scarcities

When I sense an artifical scarcity, I do a quick price check on the item on amazon. Often times, I order a duplicate (or two) on the spot.

The amazon iPhone app makes this even easier.

When the item arrives, my wife uses a label maker to note the appropriate home location of the item:

The labels ensure that items accidentally left out of their place are soon returned to their home location.

When items don't return to their home location, travel costs balloon to include search costs.

Items are placed closest to frequent points of use.

A good strategy for multi-story houses is to have a duplicate of each frequently used item on each floor.

Candidates for artificial scarcities

It's not hard to think of candidates for artificial scarcities:

  • Pens and pencils cost little, but they are often hard to find. Try keeping a small pad of paper under each phone along with a few pens and pencils assigned to that pad.
  • Pairs of scissors are needed everywhere and frequently. Assign a pair to each floor or each desk:
  • We keep matches in labeled, waterproof match boxes stashed around the house in locations that are easy to reach during a power outage:
  • If you have areas of the house that go dark during a power outage, it's a good idea to set up power-failure flashlights. And, then it's rarely hard to find a flashlight when you need it.
  • First aid kits are cheap. We have one under each sink and in each car, and we use the bandaids and painkillers in each one.
    I also carry bandaids in my wallet.
  • Laptop power adapters are bulky, heavy and cumbersome. We keep laptop power adapters pre-installed everywhere we frequent.
  • Some laptops need dongles for external monitors: each display should have its own dongle in addition to each laptop having its own dongle. The same principle applies to ethernet cables.
  • We keep an Ikea Fixa tool box assigned to each floor, so that we always have easy access to screwdrivers, hammers, pliers and wrenches.
  • With kids and dogs in the house, we found it best to keep everything needed to clean up a mess under every sink: enzymatic spray for biological waste, paper towels and bleach wipes.
  • Chapstick is so cheap that it (probably) makes sense to keep one in every bathroom and in the office.
  • Umbrellas need assigned locations, and it's one of the few items that I find needs duplicates even at a single location.
  • Laser printing doesn't cost much, but we are often willing to walk a minute or more to reach the office printer. And, half the time it's broken. Save time (and agony) with your own laser printer:
  • With babies, it's good to set up a few "baby stations," each with changing pads, wipes, diapers and diaper genie. It's also good to buy a two-day supply of baby bottles, so that they can be washed in bulk rather than on demand.
  • I've made the argument that each floor should have an assigned vacuum cleaner, but my wife convincingly argues that the opportunity cost of space is higher that the opportunity cost of time in this case.

Update: Followers on twitter and readers on HN have contributed a few more suggestions :

  • Several argued that hard drive space is a digital artificial scarcity. Folks waste time managing hard drive space and deleting files instead of just buying a bigger hard drive. Out of curiosity, I checked my University quota. It's 20 gigabytes. According to amazon, a 3 TB hard drive costs 194 USD. That means the school is providing me with about 1.30 USD in storage.
  • Several readers also argued that coffee and soda are made artificially scarce in some companies, with unnecessarily long walks required to get more of what should be provided nearby.
  • Many also agreed that it was inefficient to have only one copy of some books in an office. For books that are an important technical reference, it's probably worthwhile to have a copy at everyone's desk.
  • Toilet paper should be stocked plentifully in every bathroom.
  • Kleenex should be available at every desk.
  • From @dmansen: bike tubes, guitar picks, instrument cables and sketch pads.

In the future, if you find yourself traveling to or carrying an inexpensive but frequently used item with you, consider whether you've induced an artificial scarcity.

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