Economic Lessons in Friends: Bad Christmas Presents
We explore whether Christmas gift-giving is efficient
Is giving Christmas presents inefficient? We examine the issue of whether giving gifts is inefficient using clips from the TV show Friends. We see several instances where gifts weren't appreciated, but also see gifts with great sentimental value. We share how economists have studied the issue in this video.
Joel Waldfogel's research argues that gift-giving can be inefficient due to the potential mismatch between gifts received and personal preferences. The logic is a person knows exactly how they’d spend their own money, so a potential gift can only be “as good” as what one buys him/herself and could be much worse.
Instances from the show, like Rachel exchanging gifts she receives, and friends feeling hurt, illustrate the inefficiency of some gift-giving.
Conversely, research by John List and Jason Shogren indicates that sentimental value often exceeds any potential loss from receiving an unwanted gift, making gift-giving more efficient. We see that when Monica proposes to Chandler.
Watch to learn more, and stay tuned until the end to see if my Christmas present to Allison was a hit.
Check out the video here: