Lukas Neville

"It’s probably wrong to pillage the planet in celebration of Christmas, but if pillage we must, we should at least do it efficiently."

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Wharton’s Joel Waldfogel’s work on the economic waste and inefficiency of Christmas gifts is featured in the Globe today.

I’ve been reading quite a bit about gift-giving as part of a paper that deals with the notion of favours and gifts in trust building.  One of the reasons I suspect we’ll never see Waldfogel’s perfectly logical prescriptions broadly adopted is that gift-giving is not just an act of exchange:  It is a language.

Theodore Caplow (as part of the Middletown III studies) investigated Christmas gift-giving in an average middle American town.  He concluded:

“Gift exchange, in effect, is a language that employs objects instead of words as its lexical elements. In this perspective, every culture… has a language of prestation to express important interpersonal relationships on special occasions, just as it has a verbal language to create and manage meaning for other purposes.
Visualizing Christmas gift giving as a language - or, more precisely, as a dialect or code - helps to explain, among other matters, the insistence on wrapping and other signs to identify the objects designated for lexical use and the preference for the simultaneous exchange of gifts at family gatherings rather than in private.
Gift messages are due from every person in a parent-child relationship to every other. The individual message says “I value you according to the degree of our relationship” and anticipates the response “I value you in the same way.” But the compound message that emerges from the unwrapping of gifts in the presence of the whole gathering allows more subtle meanings to be conveyed. It permits the husband to say to the wife “I value you more than my parents” or the mother to say to the daughter-in-law “I value you as much as my son so long as you are married to him” or the brother to say to the brother “I value you more than our absent brothers, but less than our parents and much less than my children.” These statements, taken together, would define and sustain a social structure, if only because, by their gift messages, both parties to each dyadic relationship confirm that they have the same understanding of the relationship and the bystanders, who are interested parties, endorse that understanding by tacit approval.”

There is no question that Christmas gift-giving involves extraordinary waste and inefficiency in economic terms:  But any ‘solution’ to this social problem must address our tendency to use gifts to convey sophisticated, compound signals about our relationships with others.  I’m not convinced that Waldfogel’s clever notion of charity gift cards serves this purpose.

Caplow, T. (1984).  Rule enforcement without visible means: Christmas gift giving in Middletown.  American Journal of Sociology 89(6), 1306-1323.  [Link]

"15th out of 18"

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— The importance of forgiveness, in a list of 18 values as ranked by a sample of American managers.  (Source)

There’s evidence to believe that people value forgiveness in their personal lives.  But when it comes to economic contexts, they seem to leave that value at the door.  I’ve been reading quite a bit recently about the way that our expectations, judgments, and moral reasoning seem to differ when we think of our interactions as belonging to the ‘work’ domain.

For instance, in a wonderful experiment by Liberman, Samuels and Ross (source), they had participants play an n-move prisoner’s dilemma (PD) game.  In all cases, the structure of the game was exactly the same:  The payoffs, rules and procedures were identical for all participants.  But some participants were told that the game was called “The Community Game”, while others were told the title was “The Wall Street Game”.  The players in the “Community” game cooperated more than two thirds of the time; players in the “Wall Street” game cooperated less than a third of the time.

In a series of recent studies, Sanford Devoe has uncovered what I view as a related set of findings.  When people are charged with dividing time or food, they tend to support egalitarianism.  But when they’re charged with dividing the same value in money, their egalitarianism disappears (source).  And though people may be willing to volunteer their time to help others, the minute they start to think of themselves as ‘economic evaluators’, their willingness to volunteer plummets.  Just like the ‘Community Game’, all it takes is a subtle prime:  In one of the studies, willingness to volunteer dropped as a simple function of having read money or economics-related words from a list (source).

The idea that subtle cues can activate social versus economic behaviour is not new, of course:  Blau (Exchange and Power in Social Life, 1964) made the argument that different norms govern economic exchange and social exchange.  Associations in social exchange are “ends in themselves”, while in economic exchange, associations are means to other, self-serving ends.  And so, we expect different things out of each type of relationship.  In a social exchange relationship, Blau writes, ”…a time consuming service of great material benefit to the recipient might be properly repaid by mere verbal expressions of deep appreciation.”  In social exchange, it would be crass and might undermine the relationship to try to account and fully repay the cost of a favour received in material terms.  But in an economic exchange relationship, the same accounting and repayment might be entirely expected.

I think all this research bears considerably on the ongoing debate about so-called “social entrepreneurship”.  The usual distinctions used to separate firms from charities (for-profit vs non-profit, for instance) aren’t particularly useful when trying create a crisp definition of social entrepreneurship, as Ana Maria Peredo argues.  Perhaps we ought to give as much consideration to the distinct psychological differences between traditional and ‘social’ enterprise as we do to the traditional structural, strategic and regulatory ones.  It strikes me that the degree to which people in any given situation conceive of themselves as economic versus social actors could have a considerable impact on the choices they make and the behaviours they enact.

Kurzynski, M. (1998). The Virtue of Forgiveness as a Human Resource Management Strategy Journal of Business Ethics, 17 (1), 77-85 DOI: 10.1023/A:1005762514254