What to Get an Economist for Christmas?

Christmas and economists go together like — well, like drinking and walking. Joel Waldfogel, the economist who is famous for highlighting the deadweight loss of gift-giving, has a new book out called Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays. A few years ago, we argued that gift cards in particular are a bad idea. Alex Tabarrok, writing at Marginal Revolution about what he wanted for Christmas, put it this way: “The economist in me says the best gift is cash. The rest of me rebels. … [W]e want the gift giver to buy something for us that we would not have bought for ourselves. Or more precisely, one of our selves wants this — the self that is usually restrained, squashed, and limited, the wild self, the passionate self, the romantic self.”

So today’s question is: what’s an optimal gift for the economist on your shopping list?

If you qualify for the following question, you might want to answer it as well: what’s the best (or worst) gift you’ve ever been given by an economist?


JC

My $0.03: the optimal gift for the economist on your shopping list is something that he/she clearly wants to buy but for some reason hasn't purchased already. My sister wants a Snuggie but refuses to buy one b/c she said that the purchasing process would make her feel silly b/c it's an 'as seen on TV' type of product. Plus, it's easier to avoid friendly ridiculy of a silly product if you say that you received it as a gift. Or if there's something that someone wants but feels is too extravagant e.g. a gift card to that restaurant that he/she feels is too expensive, etc.

Owen

a copy of Super Freakonomics....

Dave

My economist father got me some great beer last Christmas. Can't ask for anything better than that.

JF

You buy an economist something they want, but won't buy because the transaction cost of purchasing the good is to high for them, but low enough for you.

Jordan B

I don't know that there is an optimal gift but I think it's safe to say that a there is additional utility associated with a gift as opposed to cash or a gift card. The sentiment involved can raise a gift's value far beyond that of pure cash. See last week's 30 Rock episode for a great example...

tom

A donation in their name to the Human Fund

Alyssa

I got my husband, a professor of economics, Beatles Rock Band. It was the best gift ever. That and the newest Malcolm Gladwell book.

Richard, UK

I recently had a very similar scenario when my Mother asked me what I wanted for Christmas. I said 'something you think I will like'. That is the point isn't it? Waldfogel, although I admire his work, has missed some of the key benefits from gifts.

The 'surprise element', people value the prospect of a potentially fantastic gift. The benefit of a gift 'signalling' how much someone has bothered. I also agree with JC, it is a way to overcome price elasticity and perhaps make an investment that you may not have made for yourself but that would improve your life.

Ben

Something the economist wants, but does not value higher than or equal to the cost to acquire it. If you choose to incur that cost, then you have made a gift to him/her. However, that economist may be prone to selling that item since its cash value its higher than its usefulness to him/her.

Example: I have a Harmony remote and a PS3. The Harmony adapter to make the remote work with the PS3 is $60, which is 80% of the cost of the remote. To me, that's too much. If my brother were to give it to me as a gift, I'd be happy.

Dan at GMU

For the budding economists like myself you can always give text books. Something we would have been required to buy on our own and which at the end of the semester have a resell value making us better even better off.

Bryan

If you can find something they want but don't know exists, then that would be efficient.

Your gift is essentially the search cost of finding this new thing.

Of course, you have to be sure they'd want it if they knew about it...

M.B.

A kitty cat

kc

optimal gift for the economist: hot air
the worst gift you've ever been given by an economist: George W. Bush

Ian Kemmish

A tin of caviar without a tin opener. Then we can spend the rest of the day watching him or her assume that the tin is open and learn that that doesn't help.

NM

Nothing. The invisible hand will provide. Anything else is socialism.

Ben Ho

I think saying that gifts only create dead weight loss is a sadly narrow minded view of gift giving. Even without appealing to behavioral economics, Colin Camerer has a nice paper in the ASR about gift giving as a signaling game, where by choosing the gift they wanted, you signal how well you know that person. Which makes perfect sense to me, and is a valuable economic institution.

Raymond

A gorgeous dataset that will keep him/her occupied til next Christmas.

Obvious

The optimal gift for an economist is relaxing a binding constraint.

ST

cash! no transaction cost or no any kind of frictions for that matter.

wktcs

wouldnt the best gift to give an economist be a tenured position? well, an academic economist, anyway.