An economist once calculated that gift-giving destroys value, because a values a present below its price.
The calculation is correct and the conclusion is wrong, which makes it a useful example.
The error is in what is being valued.
A gift information about attention, and the object is the carrier rather than the content.
Cash carries no such information, which is why it is acceptable between some relations and between others.
The pattern of who may give cash to whom is stable across very different societies.
It runs downward in age and status and is awkward in the reverse direction.
had described this before economics attempted to price it.
A gift creates an to return one, and the is the point of the transaction.
A relationship maintained by open accounts is a relationship, and one settled immediately is a purchase.
Returning a gift of exactly equal value too quickly is therefore a way of ending an politely.
Firms use the same mechanism and describe it as marketing.
A free sample produces purchases at a rate that its cost does not explain.
Regulations on gifts to doctors were introduced after the effect was measured in data.
A meal of modest value predicted changes worth far more, which the s denied while the data held.
is expected here, since the mechanism operates without awareness and feels like nothing from inside.
A rule that permits small gifts and forbids large ones misunderstands the finding.
Size is not what produces the , and a cheap gift is the efficient version of an expensive one.