by Adam Juda on Sunday, December 25, 2016
As a young child, I always viewed the phrase It's better to give than receive with a healthy dose of skepticism.
After all, giving a present involves many types of expenditures. There's the monetary cost of the present. There's the time required to select that present. There's even the dastardly effort required to wrap it. And then, after all that, what do you have to show for it? A perfunctory smile and a thank you note from the recipient - and that's if you're lucky.
For most of my life, I placed It's better to give than receive among my collection of other meaningless phrases like I hope you feel better and I'm sorry. It wasn't until I began writing The Software Pricing Handbook that I was blessed with a miraculous revelation.
Economics can explain how giving is better than receiving in some cases. Even better, the analysis doesn't rely on wishy-washy phrases like the value of happiness, altruism or any other such nonsense.
You may be familiar with the peculiar Christmas tradition known as the white elephant gift exchange, but you probably aren't aware of its historical connection. Way back when, the ruler of Siam would present a rare white elephant to certain individuals who had caught his attention. Far from desirable, the potential present was viewed with terror. As the white elephants were considered sacred, they could not be put to work, despite the fact that they required significant upkeep and care.
Those who received white elephants suffered greatly. Not only did their wallets shrink, but their stress levels increased dramatically each time the king inquired as to how much they enjoyed his presents.
In modern times, those who receive gifts must often suffer an additional cost (the disposal cost). Many gifts cannot simply be tossed into the trash, but must be taken in for recycling or repackaged and re-gifted to unsuspecting victims.
If you're looking to give someone a valuable present this holiday season, why not purchase a copy of my first novel Strategic Pricing? It's a quick read that examines many of the ways that pricing can be used to meet a wide array of business objectives.