Republished from The Decision Lab. The Decision Lab is a behavioural science consultancy dedicated to creating social good by helping individuals, organisations, and governments make better decisions. I am a Staff Columnist for The Decision Lab. Subscribe here for the applied behavioural insights newsletter.
Original article published here.
"The Gift of The Magi" is my all-time favorite short story. Written by O. Henry, it tells the story of a young lady, Della, and her husband Jim. Della wants to buy a good gift for her husband, but she is short of money. So she visits a hairdresser, who cuts her long locks of beautiful hair and pays her $20 in return. She uses the money to buy an expensive gold chain for husband’s favourite pocket watch.
When Jim comes home that evening, she gives him the chain and admits to selling her hair in order to be able to afford the chain. In return, Jim gifts her a set of ornamental combs for her once-long hair and admits to selling his pocket watch to get money for the combs. In other words, both of their gifts were of no use to the receivers, and yet, they didn’t complain because the incident demonstrated how much they loved each other.
My other favorite thing to do is to create contemporary versions of classics.
So here’s "The Gift of Magi: Reloaded."
This is the story of young Della and her husband Jim. Della wants to buy a good gift for her husband. After a few hours of browsing for inspiration through Pinterest and Instagram and reading through many content pieces such as “50 things to get for your boyfriend this season,” she decides to give him the latest PS4 game—"Call of Duty: Black Ops Cold War."
To be able to afford the overpriced game, she decides to get rid of the FitBit she had been gifted the previous Christmas. Given its unused, brand-new status, she manages to sell it for a handsome amount on eBay and proceeds to buy the game. In the evening, when Jim returns home, she excitedly hands him a copy of the the new "Call of Duty." He informs her that he has upgraded his PS4 to the shiny, new, dashing PS5, making the game unusable. Then he proceeds to gift her a FitBit premium subscription, which he thought would go well with his gift from the previous year.
That Christmas, Jim plays his PS5 for 24 hours straight. Della researches online for ways to cancel Fitbit subscriptions.
What’s my point? Buying gifts is hard, and we need science to help us.
The science of gift giving
Gift giving is an important social custom that has many layers to it. It is a representative microcosm of many social constructs—identity, social norms, similarity, obligatory rituals, reciprocity, and so on. A gift giver has several objectives: to satisfy the recipient, to signal their status, to represent the status of the relationship, and so on. In addition to balancing all this, add into the mix the paradox of choice—the feeling of paralysis that arises when we're faced with too many options. Gift giving is an art, but calls for science, too.
If you are struggling to cross those last few names off your Christmas list, might I complicate your life just a little bit with a few more factors you should consider? Behavioral science can offer us a few evidence-based tips on how to pick the right gift for somebody.
What does your gift say about you? And about the recipient?
In his iconic paper "The Social Psychology of Gifting," the psychologist Barry Schwartz explores the idea of the gift as an identity marker.  It is a common thesis that gifts represent the identity of the giver: we give gifts that force others to form a certain image of us. A rich person might find joy in giving conspicuous gifts, while a book lover judges gift givers on the genre or the quality of book they choose to give.
The lesser-explored idea is that of the gift representing the identity of the gift receiver. Schwartz gives the example of parents imposing their vision on children with the selection of gifts such as a science kit or a Barbie doll. The gift then becomes a subtle way of telling the recipient the identity others expect from them.
So, make sure your gift is not giving someone a message they don't want to hear.
Did you tell yourself “I love this, so I am sure he will love it as well”?
A gift is often seen as a representation of the similarity between the giver and the recipient. An interesting paper by Elizabeth Dunn and team explores this theme further.  In a series of experiments, participants were led to believe that either an acquaintance of the opposite sex or a romantic partner has gifted the participant a desirable or an undesirable gift. After receiving the gift, participants rated how similar they thought they were to the person who gave them the gift.
The results showed that after receiving an undesirable gift, men were likely to rate themselves as less similar to the gift-giver. Men even went on to report a negative outlook for the relationship because of this perceived dissimilarity. (Women's ratings of similarity weren't significantly affected by the gift they received.)
So, don't risk buying a gift for under the assumption of similarity. Especially, if you are gifting something to men.
Did you ask the recipient what they wanted?
As much as we love surprises, science suggests thinking twice before springing one on someone you love. Gino Francesca and Francis Flynn performed experiments with gift registries to dig deeper into this.  In a series of experiments, participants were required to choose from a preselected set of gifts. The paper concluded that gift recipients were more likely to appreciate a gift when it was something they had explicitly requested. Meanwhile, gift givers (falsely) assumed that an unsolicited gift would be considered to be more thoughtful by the recipient.
Planning a surprise? Think about letting the recipient in on the secret!
How much did you spend on your gift?
And finally, how much is too much—and how little is too little? Another paper by Flynn, et al.  found interesting dichotomies in how recipients and givers viewed the cost of a gift. Gift givers expect a positive correlation between what they spend and how much the recipients will love the gift. And the gift recipients? They don’t care about the monetary value!
That might have just saved you a lot of money. Like they say, it's the thought that counts!
Finding the perfect gift
Ok, so clearly, Della and Jim need a better framework to choose gifts for each other. After having gone through this one time too many, I have decided to use a consultant's approach to gift buying. For those who are still crossing things off their lists, here’s an easy primer to gift giving:
Category 1: The Gamble Gift
These are gifts that the recipient dreamt of for a good period of time. They have made lists of features, they have seen Youtube videos of comparisons, they have seen unboxing videos. They know exactly what they want. Now, caveat emptor - this could work out really well, but it could also strongly backfire. How does that happen?
Well, it's perfect when the recipient gets exactly what they wanted. The best way to make this happen is to keep your ears open for all kinds of hints. May I suggest keeping an eye on Google search history?
But, it's not so perfect when the recipient has invested too much time in research, knows exactly what brand they want and the gift giver ends up giving a less preferred brand. This would earn some hatred because now the recipient cannot waste money and buy what they actually wanted.
Category 2: The Grocery List Gifts
You would not believe the number of times this gifting happens, sometimes even unknowingly. Getting gifts that people consider as "have to buy" items is the worst. The only way to get out of this trap is to peek into other people's shopping carts before paying. If it's lying in a family shopping cart at a grocery store, don't gift it.
Category 3: The Recycling Gifts
When you gift something that the recipient does not want and would never pay for, assume you will get this gift gifted back to you in a few months. After some recycling. There's no verbal cues for this; just the silent reprisal of a gift that never deserved to be a gift.
Category 4: The Perfect Gifts
The trick is to find things that people want to own, but would be guilty spending money on. When they get it as a gift, it's perfect. They got it without spending money on it. And this list is narrow but has high scope: Amazon's Alexa. A nice passport cover. Concert tickets. One of those beautiful notebooks. Fun beer glasses. Quirky coffee mugs.
You know the pattern now. Think of all things around you that you got as gifts but didn't throw away. That's it. That's the perfect gift. They lurk around forever. You cannot get rid of them, because you wanted them.
So there you go. Behavioral science to the rescue once again.
By the way, in case you want to thank me, I have been ogling projectors for a while on the internet. Just saying, I am not averse to begrudgingly accepting this perfect gift.
Schwartz, B. (1967). The social psychology of the gift. American journal of Sociology, 73(1), 1-11.
Dunn, E. W., Huntsinger, J., Lun, J., & Sinclair, S. (2008). The gift of similarity: How good and bad gifts influence relationships. Social Cognition, 26(4), 469-481.
Gino, F., & Flynn, F. J. (2011). Give them what they want: The benefits of explicitness in gift exchange. Journal of Experimental Social Psychology, 47(5), 915-922.
Flynn, F. J., & Adams, G. S. (2009). Money can’t buy love: Asymmetric beliefs about gift price and feelings of appreciation. Journal of Experimental Social Psychology, 45(2), 404-409.