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5 Things You May Not Know About the Psychology of Gifts

How to decide what to give your family and friends this holiday season.

The festive season is approaching fast, and many of us will soon be thinking about presents to buy for our loved ones, friends, or colleagues. But how much do you really know about the psychology and economics of gifts? Here are some nuggets from the literature.

Tactical giving: men vs women

There are lots of good reasons to give gifts. From an evolutionary perspective, this also includes tactical motivations, such as creating a good impression, displaying financial resources or as a means for seduction.

Research on young adults has shown that men claim to have tactical motives for giving gifts to romantic partners more often than women. Furthermore, women are aware that men are more likely to use tactical motives. Men, on the other hand, think that both sexes share these motives equally.

"I can't accept that!" Asians vs North Americans

Another important reason for giving gifts can be reciprocity, and our cultural background can play an important role in how we deal with gift exchanges. Cross-cultural psychology suggests that Asians think of themselves more in relation to others, whereas North Americans tend to think of themselves independently of others.

Studies show that Asians are more likely to refuse a small gift from a casual acquaintance, because they would feel indebted if they are unable to reciprocate. North Americans, by contrast, are less likely to consider a need to reciprocate, and they are more likely to accept the gift on the basis of its attractiveness.

My pain, your gain? An economist's view of gifts

Back in 1993, Joel Waldfogel famously asked a question that only an economist would ask: Is Christmas efficient? The answer would be yes if the present you give had the same price tag as the value the recipient would assign to it. But many of us know it’s not unusual for the gift-giver to spend more on the present than it’s worth to the recipient. Waldfogel referred to this gap as "The Deadweight Loss of Christmas” and estimated that “between a tenth and a third of the value of holiday gifts is destroyed by gift-giving” — a “welfare reduction” in economic terms.

The gap implies that recipients of gifts would be much better off if they received a gift’s cash equivalent. However, some economists have also contradicted this finding, since gifts also have sentimental value.

"Just what I always wanted! Really!" The satisfaction of receiving

Does thoughtful gift-giving pay off? While we can all agree that gifts come with sentimental value, there is in fact evidence that suggests we shouldn’t rely on the element of surprise too much to create value.

One piece of research showed that gift-givers believed that both gifts on a wish list and unlisted, thoughtful gifts would be equally appreciated by recipients. In reality, though, gift-recipients were more appreciative of gifts chosen from a wish list than alternative gift choices.

Judging a gift by its cover: presentation is everything

While surprises may be a bad idea, there is another way to work with a gift-receiver’s expectations.

A recently published study looked at the effect of gift wrapping on how recipients feel about the gift. The authors of the research found that a friend's gift that is sloppily wrapped is liked significantly more than a neatly-wrapped one. This is because sloppy wrapping sets low expectations, which are then easily exceeded by the gift.

But beware – the opposite is the case if the gift-giver is an acquaintance. This is because wrapping neatness “serves as a cue about the relationship rather than the gift itself.”

Where do these insights leave you with respect to your choice of a Christmas present for your significant other? If you’re an economist, maybe you should resort to cash or gift cards. For the rest of us, it should probably be an item from their wish list — sloppily wrapped.

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