Abstract
Our research uniquely shows that scarcity cues, when effectively managed by the service firms, can lead to favorable purchase decisions. We investigate how service firms that are scarce on time resource (busy) vs. money resource (poor) are perceived differentially on the two basic dimensions of social perceptions: warmth and competence. Across four studies, we provide the first empirical evidence that busy service firms are perceived higher on competence and poor service firms are perceived higher on warmth. We also find that service firms that are both busy and poor have the highest purchase preference compared to either busy or poor service firms. In addition, purchase preferences are moderated by the consumption contexts (exchange vs. communal relationship domain). Managerially, our findings that scarcity cues influence purchase preferences can benefit the design and execution of marketing strategies.