The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.

Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits of the poor. Others emphasize environmental factors such as housing or financial access. We instead consider how certain behaviors stem simply from having less. We suggest that scarcity changes how people allocate attention: It leads them to engage more deeply in some problems while neglecting others. Across several experiments, we show that scarcity leads to attentional shifts that can help to explain behaviors such as overborrowing. We discuss how this mechanism might also explain other puzzles of poverty.

An argument is categorical if its premises and conclusion are of the form All members ofC have property F, where C is a natural category like FALCON or BIRD, and P remains the same across premises and conclusion. An example is Grizzly bears love onions. Therefore, all bears love onions. Such an argument is psychologically strong to the extent that belief in its premises engenders belief in its conclusion. A subclass of categorical arguments is examined, and the following hypothesis is advanced: The strength of a categorical argument increases with (a) the degree to which the premise categories are similar to the conclusion category and (b) the degree to which the premise categories are similar to members of the lowest level category that includes both the premise and the conclusion categories. A model based on this hypothesis accounts for 13 qualitative phenomena and the quantitative results of several experiments.

Choice often produces conflict. This notion, however. plays no role in classical decision theory, in which each alternative is assigned a vahie, and the decision maker selects from every choice set the option with the highest value. We contrast this principle of valiie maximization with the hypothesis that the option to delay choice or seek new alternatives is more likely to be selected when conflict is high than when it is low. This hypothesis is supported by severalstudies showing th'at the tendency to defer decision, searc!i for new alternatives, or choose the defaiilt option can be increased when the offered set is enlarged or improved, contrary to the principle of value maximization.

One of the basic axioms of the rational theory of decision under uncertainty is Savage's (1954) sure-thing principle (STP) It states that if prospect x is preferred to y knowing that Event A occurred, and if x is preferred to y knowing that A did not occur, then x should be preferred to y even when it is not known whether A occurred We present examples in which the decision maker has good reasons for accepting x if A occurs, and different reasons for accepting x if A does not occur Not knowing whether or not A occurs, however, the decision maker may lack a clear reason for accepting x and may opt for another option We suggest that, in the presence of uncertainty, people are often reluctant to think through the implications of each outcome and, as a result, may violate STP This interpretation is supported by the observation that STP is satisfied when people are made aware of their preferences given each outcome

A previously unobserved pattern of choice behavior is predicted and corroborated. In line with the principle of compatibility, according to which the weighting of inputs is enhanced by their compatibility with output, the positive and negative dimensions of options (their pros and cons) are expected to loom larger when one is choosing and when one is rejecting, respectively. Subjects are presented with pairs of options, one of which-the enriched option-has more positive as well as more negative dimensions than does the other, impoverished, option. Because positive dimensions are weighted more heavily in choosing than in rejecting, and negative dimensions are weighted more heavily in rejecting than in choosing, the enriched option tends to be chosen and rejected relatively more often than the impoverished option. These findings are extended to nonbinary decision problems, and their implications for the rational theory of choice and for everyday decisions are discussed.Decision theory is concerned with the behavior of people who are faced with the problem of choosing among options. Choices are commonly assumed to reflect underlying preferences, which are expected to satisfy a number of basic conditions. Most importantly, the classical theory of preference assumes that each individual has a well-defined preference order (or a utility function) over any set of options. Each option has some personal value, or utility, for the decision maker, a well-established position in his/her preference ordering: If the person prefers option X over option Y, he/she should not also prefer option Y over option X (von Neumann & Morgenstern, 1947). In addition, if an individual has clear and stable preferences, these should be invariant across normatively equivalent methods of assessing preference and across logically equivalent ways of describing the options.Recent studies of decision making indicate that the foregoing assumptions do not always hold, because people tend not to have well-defined values and preferences. Making decisions is often hard, because we do not know how to trade off one attribute (e.g., salary) against another (e.g., leisure), how to predict the pleasure or pain of future consequences, or, for that matter, what exactly matters to us most (Goldstein, 1990;Kahneman & Snell, 1990;March, 1978;Slovic, Fischhoff, & Lichtenstein, 1982). Hence, we often arrive at a decision problem not with well-established and clearly ranked preferences, but rather with the need to determine our preferences as a result of having to decide. Preferences, it turns out, are

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