Buying Someone A Gift Is The Simplest Way To Make Them Feel Indebted To You

Gift exchange


Gifts are frequently given as part of a effort to influence somebody, often at the expense of a third party. It’s unfortunate, but true, especially when it comes to business gifts from firms and lobbyists.A new paper from Ulrike Malmendier and Klaus M. Schmidt of the University of Munich takes a closer look at this darker side of the holiday season.

It turns out that even when people are well aware that a gift is meant to influence them, there is still a powerful trigger to give something back through future behaviour or preference.

The authors write:

“In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly influence the recipient’s behaviour in favour of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behaviour but reciprocate nevertheless.

… a gift triggers an obligation to repay the gift, independently of the intentions of the gift giver and the distributional consequences. The gift seems to create a special bond between the giver and the recipient, in line with a large anthropological literature documenting that gifts create obligations. Similarly, sociologists argue that many forms of social exchange are based on a universal social norm that gifts have to be reciprocated.”

The relative size, intent, and context of the gift doesn’t matter all that much. This is a problem for governments and businesses seeking to reduce outside influence and conflicts of interest. Disclosure rules and size limits don’t make much of a difference.

When trying to make an impartial decision between to alternatives, it’s important to be aware of this effect. Everyday social interactions have all sorts of small gifts, a meal, a drink, and so on. Whether we’re aware of it or not, we tend to pay back those small gifts in the future.

Read the full paper here

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