In the Agora: Gift-Giving From the Heart

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December 22, 2006

Gift-Giving From the Heart

I've posted a lot about the Deadweight Loss of Christmas, which may lead some of you to wonder whether I habitually reduce the generous spirit of the season to cold calculation. The answer is yes, and I'll elaborate a bit further here with a conundrum our more festive readers might help me unravel. I want you to imagine the following scenario, which is fictional:

I have a friend who is an avid birdwatcher (I can use this information to accurately estimate her preferences, so this won't necessarily be a post about the deadweight loss of gift-giving). I noticed that her old pair of binoculars are about to give out, so I'm going to buy her a new pair. My budget has a line item for this gift of $100.

I go to the store, and the clerk shows me a model that would be just perfect for her needs and it just happens to cost $100. But, alas, it is out of stock, and the store won't get a new truckload until after Christmas. So I write down the model number and brand and go home and fire up the Interweb. What ho! Overstock.com has some left -- for only $75 (including shipping)!

Now here's the dilemma: do I purchase the binoculars for $75 and pocket the $25? Or do I poke around some more for an even better pair of binoculars that have been discounted to the target price of $100, thus exhausting my budget? What if the extra features on this new pair are marginally less beneficial than $25? That is, most of that extra money is being wasted just for the sake of spending it.

Or I can purchase the original pair and spend the extra $25 on a second gift for her, even if the second gift will be based upon a less-accurate estimation of her preferences. To take it a step further, I can try to avoid that deadweight loss by just spending the $25 on a gift certificate to Wild Birds Unlimited, but this strikes me as a little too calculated, as if I'm saying to her, "Here, I've attached an exact dollar figure to our friendship." Topping off a present like a gas tank might make the exchange seem insincere.

Questions like these can paralyze me like traffic at the mall.

Posted by Zach Wendling at December 22, 2006 11:18 AM

Comments

I just came by to say Merry Christmas to all ---which didn't cost me a thing.

However, I can't resist a comment. I don't get it. If you budget $300.00 a month for the electirc bill, and you receive a bill for $250.00, do you feel guilty for pocketing the extra $50.00?

Posted by: Sherry Early at December 23, 2006 08:50 PM | permalink

I didn't want to disturb the excellent entries published above this, here at In the Agora, so I will post my note here:

To all of the bloggers here, and the commenters and readers: Merry Christmas to you and yours! God Bless!!

Posted by: Aakash at December 26, 2006 12:44 AM | permalink

I don't know if Zach or anyone else will read this since I'm only now catching up on ITA, but I do think you're analyzing this too much.

I understand the weird feeling from "pocketing" some money that was budgeted for a gift, or from trying to hit the target total with ancillary gifts, but I think that misses the point of gift-giving. All the options you have mentioned are perfectly acceptable. It really is the thought that counts, and if you know a person well enough to get them something they'll really enjoy, the exact amount you spent is irrelevant.

Posted by: Eric Seymour at January 3, 2007 09:51 AM | permalink

December 22, 2006

Gift-Giving From the Heart

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