Suppose you’re trying to impress a loved one with a generous gift this holiday season, says Kimberlee Weaver, assistant professor of marketing in the Pamplin College of Business. One option is to buy them a luxury cashmere sweater. A second option is to add in a $10 gift card.
If their budget allows, most gift givers would choose the second option, as it comprises two gifts — one big, one small, Weaver says. Ironically, however, the gift recipient is likely to perceive the cashmere sweater alone as more generous than the combination of the same sweater and gift card. “The gift giver or presenter does not anticipate this difference in perspectives and has just cheapened the gift package by spending an extra $10 on it.”
Weaver is part of a research team that recently discovered, through a series of studies, what the team has called the “Presenter’s Paradox.” The paradox arises because gift givers and gift recipients have different perspectives, Weaver says. Gift givers follow a “more-is-better” logic; recipients evaluate the overall package. [continue reading…]