Hurry Up! Better to Get It Now Than to Be Sorry Later: The Effects of Product Rationing on Stockpiling Propensity Before Natural Disasters

Abstract

When natural disasters are imminent, retailers often aim to curb consumer stockpiling and promote equitable distribution of critical commodities by employing product rationing or purchase quantity limits. However, marketing studies have shown that restricting purchase quantities tends to increase product desirability and, consequently, sales per consumer. Due to these contradictions, this study investigates how imposing different purchase quantity limits in the wake of a natural disaster impacts consumer stockpiling propensity. We also explore how the use of signs advocating social norms or social nudges moderates this relationship. Using a scenario-based experimental design, we find that two mechanisms take place. First, when consumers' needs were less than the set purchase limits, the limits positively and directly affect consumer stockpiling propensity due to the anchoring effect. Additionally, under the same premise, purchase limits exhibit a negative indirect effect on consumer stockpiling propensity mediated by consumers' perceived future regret. Though we do not observe any significant effect of social nudges in the presence of purchase quantity limits, they significantly reduce consumer stockpiling propensity when no limits are placed. Retailers, therefore, should carefully define these limits to balance these opposing forces more effectively and promote equitable distribution of essential products for natural disaster preparedness.