Why You May Skimp on a Good Friend’s Gift

Imagine that you’re buying a bottle of wine for a close friend or loved one, and the store is offering a free gift if you buy a slightly inferior bottle rather than a superb one. Which do you buy? You’re more likely to go for the cheaper bottle research suggests.

“We dub this the ‘friendly taking effect’ because such overt taking behavior is actually rooted in a friendly intention, that is, concern for the total benefit,” write the University of Florida’s Yanping Tu, the University of Chicago’s Alex Shaw, and Chicago Booth’s Ayelet Fishbach.

This seems counterintuitive. Wouldn’t people want to give their loved ones the very best? The researchers tried out a different hypothesis: just as people are more likely to give more to close friends than strangers, people may be more likely to give less to close friends than to strangers if there is a mutual overall benefit for doing so. In this situation, the gift-giver may see herself and a close friend as a unit—and choose the best total gift for the unit rather than for either individual. The total gift could end up including the gift purchased, a free gift, and any money saved. Call it altruistic selfishness.

The researchers conducted seven experiments that explored different kinds of relationships—including naturally occurring friendships, and those developed in the lab. The results of each experiment support the hypothesis that, because people focus on total benefits when making decisions about how to allocate resources between themselves and people they’re close to, they choose the option that benefits themselves.

In one experiment, 63 University of Chicago undergraduates were invited to enter a raffle in which each winner and one person they knew would sample gourmet chocolate truffles. They had to choose between two differently distributed prizes: in one, the winner would receive seven truffles and the other person three; in the other, the winner would receive two truffles and the other person six. The truffles could not be shared.

When participants knew they’d sample the truffles with someone they felt close to, almost two-thirds chose the package where they would receive more truffles. But when participants anticipated sampling truffles with someone they felt less close to, the fraction flipped, and only about one-third chose that option. “The participants were more likely to take away a little benefit from a close other rather than a distant other in order to get a lot more benefit for themselves,” the researchers write.

For marketers, these findings indicate that rewards and other bundled incentives could be particularly influential to people making purchases for close acquaintances. Say a cable company is trying to get customers to refer friends to the company. The closer the customers are to their friends, the more sensitive they will be to the total benefits offered, and the less sensitive they’ll be to who gets what. The company could therefore emphasize the total benefits offered, including the reward. Although consumers generally spend more on gifts for people they’re close to, the researchers say, “they might also be more influenced by discounts, sales, and other saving opportunities” when buying for those loved ones.