I want credit for the gifts I give. Don’t you?

This morning I listened to a local radio host who was describing an awkward situation. He explained that he had recently been at a dinner party hosted by folks whom he barely knew, and he and his wife had taken a bottle of wine as a gift. When they arrived at this other couple’s home, he realized that he had forgotten to bring a tag for the bottle so that the hosts would know whom it was from.

This vexed our hero greatly–after all, he reasoned, he and his wife would not receive “credit” for the gift from their new acquaintances. When they went inside the house, a friend took their coats and offered to take the bottle as well, but our hero wanted to keep it with him. He sought an opportunity to hand the bottle personally to the host or hostess, but they were engaged with other guests (there were close to a hundred at this party!). Defeated, he took the unlabeled wine to the gift table, where he saw several other bottles of wine–some labeled, some unlabeled. This further dismayed him, since he judged that his wine was slightly more expensive than the other unlabeled bottles, but his hosts would never know that he had brought the most valuable bottle.

Back to the radio program, the host was slightly ashamed of his desire to receive credit for bringing a gift. Nevertheless, he solicited ideas from his callers about how he could still get credit for the gift–perhaps calling or sending a note thanking the couple for their hospitality and asking them how they liked the (particular) wine.

Some callers criticized the radio host for trying so hard to get credit. He retorted by daring them to refrain from placing “From” labels on any gifts they gave next Christmas.

This got me thinking about signaling theory and gift-giving. Most of us understand that gift-giving is different from other types of transfers, because certain goods and services have different values in use from their values in exchange. For example, I am not a very good cook. I can make a couple of decent dishes, but nothing fancy. If my friend is sick, however, she will feel much better if I bring over a home-cooked meal than if I bring her takeout, even if the quality of my meal is inferior. The time spent and the personal nature of the service adds value beyond the basic utility of the food. Similarly, if I choose to buy my wife six bags of M&Ms for Valentine’s Day rather than a single Whitman’s Sampler, she won’t be as pleased–even though the M&Ms may provide more chocolate at a cheaper price. The connotation of the gift provides a social signal that goes beyond its purely utilitarian value.

Back to the wine story–the wine is worth more to the giver and the recipient than its monetary value in exchange. The wine signals two things: first, that the invitation is appreciated, and second, that the guests are the sort of people who are socially aware and not weirdos. So, it is difficult to blame the guest for wanting to make sure that his hosts see that the bottle is from him, since that was the whole point of the gift in the first place.

In a different situation, he might not care at all if he gets credit for the gift. Say that there is a piggy bank at that party, and the hosts are soliciting donations for relief in Haiti (kind of strange, but work with me here). If our hero were inclined to make a donation (perhaps one comparable to the price of the bottle of wine), he wouldn’t think twice of just pulling cash out of his pocket and putting it in the piggy bank when no one was looking, as opposed to handing a check to the host in order to get the credit. (At least, I hope this is the case.) The purpose of the gift in this situation is to help needy people, and the satisfaction of that act is its own reward.

So, when the purpose of the gift is the signal, it is rational to make sure that the signal is properly received. When the purpose is personal satisfaction or spiritual edification, the credit matters less than the spirit in which the gift was given.

One of the callers into the show said, “You know what I would do if I had been in your situation? I would get on my 50,000-watt, syndicated radio program and whine about not getting credit for giving wine.” Burn!

P.S.: I enjoyed these two Econtalk podcasts on signaling theory with Mike Munger and Robin Hanson.