Saturday, December 24, 2011

Avoiding Xmas Deadweight Loss, Part V

Just in case you haven't finished up your shopping yet, here's some more holiday saving (ruining?) advice on gift giving:
my first guideline for efficient giving: Gift-giving should be redistributive. Reciprocity is a lovely sentiment, but the holidays are an excellent time to rebalance the overall family or friend group portfolio in favor of its needier members.
Not sure if I agree with the desirability of that, but I think it is definitely true. Here's another:
When you step outside the circle of things you know for sure your gift-getter likes, you risk creating a massive deadweight loss. (You give her a ticket to Las Vegas, without knowing that she hates gambling.) But with the greater risk comes a greater potential reward.
And once you've decided to give a gift, you should give an experience:
In particular, people consistently overrate the extent to which money in general and material possessions in particular will make them happy, underweighting interpersonal relationships and new experiences in the process. So try to give your loved ones the opportunity to go do something new, ideally with other people.
Here's part one, two, three, and four of the series.

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