Why gift-giving is inefficient
Yes! Economist Joel Waldfogel wrote an article in the Globe yesterday saying exactly what I’ve been saying for years: the custom of exchanging gifts decreases people’s utility.
“When you spend $50 on me, you’re operating at significant disadvantage. You don’t know what I like. I might not have been willing to pay anything for the item you purchase for me with $50. While $50 in spending normally produces at least $50 worth of satisfaction, there’s no guarantee that $50 in gift spending will produce nearly as much satisfaction for the recipient. And if you buy me something worth nothing to me, you have destroyed at least $50 worth of value.”