Merry Christmas! The biggest holiday of a year! In this holiday, people often give gifts to each other. Though gift giving is a sentimental experience, you don’t have to be sentimental about it. There are ways that you can make your gift-receiver satisfied with your afford.
First of all, I want to state clear that unless you use cash as gift, there is usually a deadweight loss in exchanging gift. Why? It is worth noting that every products has 2 values: its market value [price] and its internal value. Market value is constant while the internal value varies, depending on each person. For example a friend gives me a Toyota and a bicycle. I live in Sai Gon, which means I won’t enjoy driving a car around the crowded city. Therefore, to me, the value of the Toyota will be low relative to its market price. Worse is the bicycle. I study in the suburban, there is no way I will ride to my college. To me, the bicycle has a negative value because I have to spent money keeping it secure.
Of course, I can always choose to sell the car. However, I will surely receive less money than the amount my friend spent. And it is called deadweight loss. The problem will be easily solved if we use cash instead. Cash is undoubtedly the most economic present. However, cash is, in most of the cases, socially unacceptable. It means we have to find another approach.
There is a common advice that we don’t buy things that someone needs. Instead, we should buy things that they won’t buy for themselves. Imagine you pick a tie for your Dad. How many ties are there in his wardrobe? Is it necessary to get one more? The problem with gift-giving is that we’re never going to do a better job of satisfying than the gift getter could do himself. If you give me 100VND, I am not going to buy a Marc Levy novel. However, if you give me the book instead, I will read it and there is a chance that I will love it [it is indeed ==]. When you walk out of the common thought about gift-giving [to give the NECESSARY stuff], you risk creating a deadweight loss. But remember that with higher risk comes higher potential award. You may get the wrong side. Or you may introduce the gift recipients with something marvelous but they have never encountered. The riskier the gift, the higher the award.
Gift-giving is not meant to be efficient. But you can do it in a more or less efficient way. Nothing is less surprising than a Christmas gift at Christmas. And nothing is ever more surprising than a Christmas gift showing that you know better than the recipient what she really wants.
Merry Christmas.
and just in case someone may want to know, I don’t need many things :p
First of all, I want to state clear that unless you use cash as gift, there is usually a deadweight loss in exchanging gift. Why? It is worth noting that every products has 2 values: its market value [price] and its internal value. Market value is constant while the internal value varies, depending on each person. For example a friend gives me a Toyota and a bicycle. I live in Sai Gon, which means I won’t enjoy driving a car around the crowded city. Therefore, to me, the value of the Toyota will be low relative to its market price. Worse is the bicycle. I study in the suburban, there is no way I will ride to my college. To me, the bicycle has a negative value because I have to spent money keeping it secure.
Of course, I can always choose to sell the car. However, I will surely receive less money than the amount my friend spent. And it is called deadweight loss. The problem will be easily solved if we use cash instead. Cash is undoubtedly the most economic present. However, cash is, in most of the cases, socially unacceptable. It means we have to find another approach.
There is a common advice that we don’t buy things that someone needs. Instead, we should buy things that they won’t buy for themselves. Imagine you pick a tie for your Dad. How many ties are there in his wardrobe? Is it necessary to get one more? The problem with gift-giving is that we’re never going to do a better job of satisfying than the gift getter could do himself. If you give me 100VND, I am not going to buy a Marc Levy novel. However, if you give me the book instead, I will read it and there is a chance that I will love it [it is indeed ==]. When you walk out of the common thought about gift-giving [to give the NECESSARY stuff], you risk creating a deadweight loss. But remember that with higher risk comes higher potential award. You may get the wrong side. Or you may introduce the gift recipients with something marvelous but they have never encountered. The riskier the gift, the higher the award.
Gift-giving is not meant to be efficient. But you can do it in a more or less efficient way. Nothing is less surprising than a Christmas gift at Christmas. And nothing is ever more surprising than a Christmas gift showing that you know better than the recipient what she really wants.
Merry Christmas.
and just in case someone may want to know, I don’t need many things :p
Kz [with the help of Slate]
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