|(Image from Kiplinger.com)|
A gift will cause a misallocation of resources if the recipient would have preferred something else that would have been no more expensive for the donor to acquire.So why do we continually "misallocate" (buy the wrong) gifts, even for those whom we know well? Researchers theorized that expressions of gratitude--smiles and hugs, for example--steer donors in the wrong direction.
Dr Yang and Dr Urminsky framed an experiment around St Valentine’s day. They picked three pairs of appropriate gifts: a dozen roses in full bloom versus two dozen rose buds that were about to blossom; a bouquet of freshly cut flowers versus a bonsai; and a heart-shaped basket of biscuits versus a similar basket of fruit...(Biscuits, i.e., cookies in American English, were chosen by both donors and recipients over flowers).
[Donor] men went for the smiles and hugs more often than it would seem that [recipient] women would have wished. Specifically, 44% of them said that they would prefer to give roses in full bloom while only 32% of the women said they preferred that gift to the two dozen buds. Similarly, with the bouquet and the bonsai, 40% of the men preferred to give the bouquet but only 28% of the women preferred to receive it.
The researchers were puzzled why the women displayed more affection over the gift with a short-term life (i.e. floral bouquet), although they said they preferred the longer-lived one (the bonsai). Really? Didn't they ask any husbands about the cold reception for a practical, long-lasting gift like cookware or an electric shaver? Don't the researchers have any life experience?
Definition of an economist: an academic who knows the price of everything and the value of nothing.