Christmas thread
- Thread starter FreeLunch
- Start date
More Christmas stuff ..........
The Wall Street Journal published an article (way too long article) noting the economic inefficiency of gift giving.
The author describes Christmas (or Hanukkah ?) gifts as an inefficient form of 'signaling' ... (ie., showing your love / fondness for a family member or friend).
The inefficiency here is the nature of 'in-kind' gifts (or compensation in another setting).
According to economists it's more 'efficient' to simply give someone cash or a gift card. That way the recipient can buy exactly what they prefer. Whereas, the giver may not know exactly what the other person wants -- thus, the inefficiency here.
My take-away here is that it may be generally useful to learn to "think like an economist" ...... but not always. "Think like an economist" needs a holiday on Christmas.
link:
https://www.wsj.com/opinion/a-perfect-christmas-is-suboptimal-7349ca68?mod=opinion_lead_pos5
The Wall Street Journal published an article (way too long article) noting the economic inefficiency of gift giving.
The author describes Christmas (or Hanukkah ?) gifts as an inefficient form of 'signaling' ... (ie., showing your love / fondness for a family member or friend).
The inefficiency here is the nature of 'in-kind' gifts (or compensation in another setting).
According to economists it's more 'efficient' to simply give someone cash or a gift card. That way the recipient can buy exactly what they prefer. Whereas, the giver may not know exactly what the other person wants -- thus, the inefficiency here.
My take-away here is that it may be generally useful to learn to "think like an economist" ...... but not always. "Think like an economist" needs a holiday on Christmas.
A Perfect Christmas Is Suboptimal
Gift giving is inefficient from an economic point of view. It’s an example of ‘expensive signaling.’
link:
https://www.wsj.com/opinion/a-perfect-christmas-is-suboptimal-7349ca68?mod=opinion_lead_pos5
