Introduction

For decades, researchers have been investigating how consumers make choices for other people in the form of gift giving. Simply giving people money or inquiring others about their own presents is often inappropriate (Camerer, 1988), therefore, when deciding for a gift, givers oftentimes attempt to guess what the receiver would like to be given. Several aspects of givers’ gift choices have been investigated, such as how givers evaluate what receivers would appreciate (Gino & Flynn, 2011; Baskin, Wakslak, Trope, & Novemsky, 2014; Cavanaugh, Gino & Fitzsimons, 2015; Goodman & Lim, 2018); and what situational factors influence givers’ choices (Steffel & Le Boeuf, 2013; Wu & Lee, 2016).

An important aspect that givers often take into consideration when making a gift choice is price (Joy, 2001). Surprisingly, so far few studies have investigated this matter (see Warshaw, 1980; Flynn & Adams, 2009 for some exceptions). Specifically, the current literature offers very little explanation for how givers decide on how much they would like to spend on a gift. This research aims to fill this gap.

Reciprocal gift giving has been long regarded as a key feature of human social life by scholars (Belk, 2010). Economic exchange and social exchange are the major models that have dominated the study of gift giving and human interaction over the past 60 years (Belk & Coon, 1993). Throughout this time, anthropology, psychology, sociology, economics and marketing provided important contributions to the field (Otnes & Beltramini, 1996). This literature shows that a receiver may sometimes find themselves in a position of indebtedness, which may lead them to reciprocate (Godelier, 1999; Morales, 2005; Marcoux, 2009), for example, by buying a gift to a previous giver at a similar price.

Another rule that may affect the decision of how much to spend on a gift regards social norms. Depending on the relationship developed between the giver and the receiver, there is an implicitly established price range. For example, close friends and lovers should be given expensive gifts, whereas acquaintances should be given more inexpensive ones (Joy, 2001). Sherry (1983) explains that “giving too much, too little, or too late can strain a relationship to the point of dissolution”.

However, what happens when reciprocity and social norms fail to head in the same direction? When a receiver is given a gift that was either cheaper or more expensive than expected based on social norm, should he/she reciprocate or conform to the social norm? Ward and Chan (2015) have suggested a bidirectional gift exchange, in which a person may be both the giver and the recipient for a single gift occasion. We have extended this exchange dyad toa retribution situation after a time lapse between the acts of receiving and giving back.

The purpose of this paper is threefold: (1) to investigate how individuals resolve this conflict, (2) to investigate whether exchanging gifts in public or private plays a moderating role in this decision, and (3) to investigate whether appreciation for the gift previously received moderates this decision.

We found that when people must choose between reciprocity and social norms, people tend to be reciprocal. However, there are a few exceptional circumstances: people preferred to follow social norms when reciprocating to an inexpensive gift in public, and when they had disliked an expensive gift they had been previously given.

These findings shed some light onto how people determine the price of a gift, a surprisingly underexplored topic in the marketing literature. Although our main contribution is theoretical in nature, understanding how people make price choices also benefits practitioners. For instance, retailers can adjust their assortments to offer products across different price ranges, whereas salespeople can make better offers to customers based on how much they are willing to spend.

Theoretical background

Gift Giving

The gift process starts with a stimulus, often an occasion (rituals or events) such as Christmas, Valentine’s Day, White Day, Mother’s Day, Father’s Day, Easter, birthdays, religious holidays, social gatherings, celebrations and wedding anniversaries (Chan & Mogilner, 2017; Belk, 2010; Davies, Whelan, Foley, & Walsh, 2010; Ruffle, 1999;). Thus, it becomes evident that gift-giving rituals are highly relevant in countless cultures around the world (Baskin et al., 2014).

Giving serves three important functions: it is an economically important phenomenon; it is socially relevant, as it can signal relationship status and information, strengthen social bonds, and fulfill social norms; and it is hedonic, as givers may increase the levels of happiness and enjoyment of their recipients (Goodman & Lim, 2018; Cavanaugh et al., 2015). Previous works have focused on the feasibility of trade-offs between the giver and the receiver (Baskin et al., 2014), or on experiential versus material gifts (Chan & Mogilner, 2017). All of them serve the similar purpose of cultivating relationships and thus fall under the social category.

The gifting literature shows that the gift process consists of four separate components: the giver, the recipient, the goals, and the gift. Ideally, givers must have some attributes, such as creativity, and some productive resources, such as money, time and effort (Clarke, 2006),before attempting to “choose the gift that most pleases and singularizes the receiver” (Baskinet al., 2014, p.169).

The reaction of the recipient is essential to the giver. Gift receivers often disregard the price of a gift when evaluating how much they appreciate it. Therefore, it is important for the giver to anticipate the receivers’ reaction and choose a gift that elicits the desired response (Baskin, et al., 2014). However, making decisions on behalf of others might be burdensome because finding an affordable gift to please a recipient is often an arduous task (Steffel & LeBouf, 2013).

Gifts are chosen to satisfy a variety of goals. These goals include improving communication and signaling commitment and caring in social relationships (Cavanaugh et al., 2015; Belk & Coon, 1993; Belk, 1979). Davies et al. (2010) offer a definition to the word gift. In their view, a “gift involves the selection and transfer of something to someone without the expectation of direct compensation, but with the expectation of a return, be it reciprocity, a change in the relationship with the recipient, or a favor or another social or psychological benefit”.

Sherry (1983) argues that any resource (objects, services and experiences), whether tangible or intangible can be transformed into a gift. The distinction between material and experiential objects was clearly drawn by Chan and Mogilner (2017). According to them, a material gift may be kept in the possession of the receiver (e.g., jewelry or electronic gadgets), whereas experiential gifts represent an event the recipient may attend (e.g., concert tickets or a photography lesson).

Giver’s Decision Making

An easy way to choose a gift is buying exactly what the recipient requested. However, givers see unrequested gifts as being more thoughtful and considerate than the opposite (Gino & Flynn, 2011). For this reason, choosing a gift often involves predicting what recipients will appreciate. A large body of research has investigated how consumers make this prediction. Most findings elucidate either how givers evaluate what receivers will appreciate (Baskin et al., 2014; Cavanaugh et al., 2015; Goodman & Lim, 2018) or what situational factors influence givers’ choices (Steffel & Le Boeuf, 2013; Wu & Lee, 2016).

The main aspect that givers take into consideration when evaluating what receivers will appreciate is desirability (Baskin et al, 2014). Givers want not only to satisfy receivers, but mainly to trigger a positive reaction (e.g. big smile) (Yang & Urminsky, 2018). Within this perspective, previous research has investigated which products people consider buying as a giftand when. For example, givers are more likely to give experiential or socially responsible giftsto socially close recipients than to socially distant recipients (Goodman & Lim, 2018;Cavanaugh et al., 2015).

When shopping for a gift, different situational factors may influence a giver’s choice. For example, popularity cues tend to be effective, since it reduces the risk associated with this choice (Wu & Lee, 2016). Another example is that when givers select gifts for multiple recipients, they tend to choose different gifts to each recipient, even when recipients will not compare gifts (Steffel & LeBoeuf, 2013). Finally, even though gift giving is a dyadic action, givers allow themselves to be influenced by third parties when selecting gifts for recipients (Lowrey, Otnes, & Ruth, 2004).

Choice of the Gift and Price

In gift giving, prices have symbolic meaning. For example, givers use gift prices to signal the importance of their relationship with the receiver (Wang & Van der Lans, 2018). A closer relationship favors more expensive gifts (Wolfinbarger, 1990). For this reason, givers expect a positive correlation between the amount spent on a gift and the extent to which recipients appreciate the gift because they assume that more expensive gifts convey a higher level of thoughtfulness, which has been demonstrated to be an overestimation (Flynn & Adams, 2009). For the same reason, when buying a gift, consumers are less sensitive to price discounts (Zhang & Jiménez, 2016).

Although price is an important aspect of any purchase, how givers take gift prices into consideration is still an under-researched topic. If people decide how much to spend on a gift based on the relationship level with the recipient, it means that they start the gift search with an estimated amount in mind. However, how do consumers decide on this price range? We propose two possible mechanisms: reciprocity (i.e. how much the recipient paid for a previous gift) and social norms (i.e. how much is acceptable to spend on a gift).

Price and Reciprocity

The literature offers two distinct conceptualizations of gifting, one more transactional and the other more relational, with a narrow focus on reciprocity (Davies et al., 2010). The analysis of the act of giving gifts from the standpoint of the recipient is based on a process of evaluation–satisfaction–reciprocity intention (Antón, Camarero & Gil, 2013). The notion that receivers may find themselves in a position of indebtedness can evoke several feelings - such as gratitude, anxiety and embarrassment – that may include the expectation of reciprocity(Godelier, 1999; Morales, 2005; Marcoux, 2009; Davies et al, 2010; Baskin et al., 2014).

Ward and Chan (2015) have highlighted that the norms of reciprocity are used to respond to a gift exchange. Many occasions in which a person decides to buy a gift arise from reciprocity, i.e. buying a gift as retribution for a previously received gift. Receiving a gift may trigger an impulse to reciprocate (Chao, 2018), even when doing so may be inefficient and potentially harmful to a third party (Pan & Xiao, 2016). Kizilcec, Bakshy, Eckles and Burke (2018) found that receiving a gift makes consumers 56% more likely to give a gift in the future.

A previously given gift may be evaluated by its perceived utility (Becker, Messer, & Wolter, 2013), functional value, social value, expressive value, symbolic value, both parties’ relational ties or recipient satisfaction (Antón et al., 2013); as well as by its price (Sherry, 1983). However, the evaluation of the price of the gift may reduce its value, since “receivers may tend to assign lower monetary value to gifts than givers paid” (Wang & Van der Lans, 2018, p. 524).

Waldfogel (1993) estimated that this reduction falls between 10%-33%.

The price of the gift previously received significantly influences the price of reciprocated gifts (Wang & Van der Lans, 2018). Therefore, it is plausible to say that when recipients become givers, they consider reciprocating by giving gifts that cost a similar price.

H1: People will present a previous giver with a gift that costs a similar price to the received gift.

Price and Social Norms

Social norms may be seen differently in sociology and psychology. In the former, the norms are either explicit or implicit rules that guide, regulate, proscribe and prescribe social behavior, whereas in the latter it refers to the patterns of group behavior (Burchell, Rettie, & Patel, 2013).

Lowrey et al. (2004) suggested that when multiple participants are involved in a gift- exchange occasion, scholars have the chance to “explore how networks recognize gift giving norms are needed, the mechanisms through which norms are determined, how newcomers learn about such norms, and how networks react and adjust to nonnormative behavior” (p.557).

Givers may be sensitive to norms that might influence receivers’ perception of the amount of money invested in the gift (Kupor, Flynn, & Norton, 2017). Social norms often force givers to buy more expensive gifts to avoid looking cheap and creating negative impressions (Wang & Van der Lans, 2018).

Lowrey et al. (2004) have developed a taxonomy of ten ways givers are influenced in the selection of a gift, and one of them is adhering to group norms through shared rules of gift behavior. Following social norms is also part of the ritual of gift giving (Wolfinbarger, 1990). Social norms dictate what can be given as gifts, in what occasions gifts should be given, to whom, in what price range, among other factors (Sherry, 1983; Wolfinbarger, 1990; Joy, 2001; Antón et al., 2013; Ward & Broniarczyk, 2016). Many businesses have been taking advantage of the incorporation of social norms around gift giving. Amazon, for example, has developed some social features to facilitate gift giving, such as wishlists and gift cards that can be scheduled to be sent on a friend’s birthday, whereas Apple's iTunes offers gift cards that may be redeemed for albums, movies and apps (Kizilcec et al., 2018).

One of the reasons people follow social norms is because they fear social punishment if they fail to do so (Cialdini & Trost, 1998). Failing to follow social norms in gift-giving may disrupt social connections, leading to a great deal of interpersonal conflict (Lorenzen, 2018). Therefore, we expect people to also choose the price of a gift based on social norms. According to this rationale, Kupor et al. (2017) found that givers believe that purchasing partial gifts is a violation of gift-giving norms. For these reasons, we derive the following hypothesis.

H2: People will decide on the price of a gift based on social norms.

Choice Between Reciprocity and Social Norms

Wang and Van der Lans (2018) assert that price plays a dual role in gift giving because the cost to the giver accounts for a negative effect on gift-choice utility, while expressing the importance of the relationship produces a positive effect on utility. Gift-exchange partners may employ different tactics to mitigate conflicts or social inequities that arise from imbalanced gift exchanges. For example, they may agree on specific gift rules (such as spending caps), participate in the choice process to signal their intentions, or agree to jointly purchase and consume the same gift. The adoption of these tactics may effectively ensure that the gifts given and received are similar in value (Ward & Chan, 2015). The gift received may be evaluated in two distinct ways, according to Givi and Galak (2017): by preference-matching utility or sentimental value. This evaluation may impact the decision process when searching for a reciprocal gift to a greater extent than just the price of the product.

When choosing between reciprocity and social norms, it is still unclear which is more important to people. This dilemma may be witnessed when a receiver must return a gift to a previous giver who has broken a social norm by giving a present that was either much cheaper or more expensive than expected. In this case, the receiver must choose between a gift of similar value (being reciprocal) or one within a more appropriate price range (being consistent withsocial norms). Our literature review shows that both reciprocity and social norms play animportant role in deciding on prices, though we seem to be, to the best of our knowledge, thefirst to investigate this specific situation.

We expect two facts to influence this choice: the type of social norm violation and the presence of an audience. We believe the receiver’s reciprocal behavior should change depending on whether the previously received gift broke the social norm by being either too cheap or too expensive. Specifically, a more expensive gift could signal more sacrifice from the giver (Clarke, 2006), whereas a cheaper gift could signal lack of care or of resources (Belk & Coon, 1993). Thus, we derive the following hypothesis:

H3: People are more likely to break social norms and be reciprocal after receiving a more expensive gift than a cheaper one.

People give gifts to signal several different things, such as love, sacrifice, wealth, generosity, etc. (Belk & Coon, 1993; Clarke, 2006). “Gift giving studies acknowledge that gift exchange is embedded in a social context” (Lowrey et al., 2004, p.547). This social context sometimes makes givers experience several negative feelings such as anxiety, pressure, and fear of making a mistake (Sherry, McGrath, & Levy, 1993).

Gift exchanges may take place either in public or private. Whenever people are being observed by others, they enter an impression management mindset, which changes their behavior (Leary & Kowalski, 1990). For example, in public, consumers donate more (DellaVigna, List, & Malmendier, 2012), are more susceptible to impulsive purchasing (Luo, 2005), and even seek more variety (Ratner & Kahn, 2002).

In a gift-giving context, givers are influenced by third parties when selecting gifts, as shown by Lowrey et al. (2004). The authors explain that in addition to pleasing the recipient, givers are also motivated by a willingness to maintain satisfactory relationships with gatekeepers (e.g. other people who participate in the purchase process or the gift-giving encounter) by, for instance, asking for opinion about what to purchase.

Thus, we expect an interaction between reciprocity and audience, such as when in public, people tend to be more reciprocal than in private:

H4: In public, people will be more reciprocal than in private.

Study 1

Study one was designed to investigate people’s preference between reciprocity and social norm under certain circumstances. We ran a web-based survey experiment using a 4 (past gift cue: no information vs. low vs. average vs. high price) X 2 (context: in public vs. private), between-subjects design. Three hundred and twenty-one North American subjects recruited byAmazon Mechanical Turk were randomly assigned to one of the eight experimental conditions.All respondents were paid $0.40 to participate. The characteristics of the sample are as follows:64.5% are male, with a mean age of 35.9, 53% have a university degree and 32.1% earn morethan $50.000 per year.

Procedure

The data collection was conducted following a few steps: Mturkers who accessed the link were first shown a consent form. Those who agreed to participate were taken to a second screen in which they were asked to imagine the scenario below:

“Every year, your family promotes a gift exchange encounter (known as Secret Santa), where the giver knows her/his receiver by a random draw. Normally, the number of relatives that join it is close to forty, and the gifts are exchanged in public (vs. private), in other words, everyone (vs. only the giver and the receiver) witnesses the gift given/received. This year the established gift price is $50, but everyone knows that a variation on it is possible. Last year the cheapest gift was $25 and the most expensive was $100. This year you have drawn the same person who gave you a gift last year. How much would you pay to buy her a gift?”

In the no information condition, which served as a control group, this was the only information provided to participants. The other three conditions contained the same scenario presented above, but with an additional statement - “you have received a gift that costed $25 (vs. $50 vs. 75)” – before the willingness to pay question. The price manipulations included either lower ($25), equal ($50) or higher ($75) amounts compared to the established price. The established price for the exchange represents a social norm. After reading the scenario, participants were asked to decide on how much to pay for this gift by choosing a price between $0 and $100.

On a third screen, participants were asked the following question: “Why did you make this choice? Please explain it in detail”. Finally, the last screen displayed some socio- demographic questions.

Results

Among the four past-gift conditions, two are directly related with social norms: the “no information” and the $50. The guideline assumption behind the other two conditions was that the informed gift prices differed from the norm (i.e. $25 and $75), therefore, the received gift should serve as a reference point. The expected implication was that after being given a gift whose price deviated from the established norm, a person would have the right to retribute thisgift accordingly. Thus, the giver’s decision should follow one of two possible paths: a) thedecision to reciprocate leads to a gift of similar price; b) the decision to follow the social normleads to a choice that observes the “around $50” rule.

A factorial ANOVA was conducted, in which the price of the gift to be given was the dependent variable, and the price of the received gift and whether it was exchanged in public or private were the independent variables. We found a main effect of past gift information, in which the gifts to be given corresponded to the prices of the received gifts (.$25 = 40.08; .$50 = 50.80; M$75 = 64.02; Mcontrol = 50.69; F(3,318) = 39.44, p < .001). Specifically, people whoreceived a $25 gift spent significantly less than people who received a $50 gift, who in turnspent less than people who received a $75 gift. The control group did not differ from the $50gift group. These results indicate that being reciprocal was considered more important thanfollowing the social norm in this decision.

We failed to find a main effect of context (Mpublic = 52.61; Mprivate = 52.67; F(1,320) = .20, . = .65), which means that, on average, people in both public and private conditions preferred to reciprocate to the giver instead of following a social norm. However, we found a significant interaction between gift value and context (.(3,318) = 3.00, . < .05). A contrast analysis showed that in public, people in the $25 condition chose to spend significantly less than in the $50 condition (.$25public = 34.69; .$50public = 51.31, . < .001). In private, however, people in the $25 and $50 conditions chose to spend the same amount on average (.$25private = 44.20; .$50private = 50.25, . > .90). This result shows that when people receive a cheaper gift than expected, they spend less on a gift given in public than on one given in private. Means in all conditions are shown in Figure 1.

This result suggests that when the received gift is cheaper than the social norm, people just reciprocate if their gift exchange is conducted in public. If the exchange takes place privately, people sway toward the patterns established by social norm and give more costly gifts.

It is important to mention that, even though most participants decided to reciprocate, they also compromised by approaching the social norm. In other words, the mean price in the $25 conditions were greater than $25, while the means in the $75 conditions were lower than $75. This behavior shows that social norms have not been completely forgone, even though the participants eventually decided to reciprocate.

A second part of the analysis consisted on evaluating the open answers subjects wrote tojustify their choices. We grouped their answers into six categories, which are described in Table1. In addition to reciprocity and social norms, we detected other reasons that may helpparticipants choose the amount to give (compromising between reciprocity and social norms).

After categorizing the answers, we compared the prevalence of each category across different conditions with the aim to better understand the drivers of our results. When participants were unaware of the price paid for their gift in the previous year, they seemed to be more concerned about fairness, in both public and private contexts. They had no reason to compromise between reciprocity and social norms, thus, following the $50 rule seemed fair in most cases, as shown in Figure 2. Interestingly, some people in these conditions mentioned that they would like to know how much the gift they received had cost (i.e. “It wasn't an easy choice to make. If I'd known the expensive of the last years gift, I'd have been about to use that as a guide line.”), which also indicates a proclivity towards reciprocity as a driver for the decision.

In the $25 conditions (both private and public), the arguments presented by participants denote a preference for social norms, with this category having the highest representativeness in this group, as shown in Figure 3. Although the average amount spent in both conditions was higher than that of the gift they had received in the previous year ($25), only those in the private condition approached the $50 rule. According to their explanations, they seemed to feel an obligation to go above $25, but not to reach $50 (“I would want to spend approximately the same amount that they had spent on me, so as not to make them feel bad or ashamed. On the other hand, I would spend a little bit more to get something they might like. So I would aim for $25 and go up to $35-40.”).

In the $50 conditions, participants faced no conflict between reciprocating or following social norms (see Figure 4). However, in their explanations, a willingness to reciprocate appeared most often (i.e. “I didn't want to upset her by purchasing a gift of greater or lesservalue”; “Because it's the same price of gift they gave me. If I give a higher priced one they mightthink I'm trying to one up them or make them feel bad. If I get them a cheaper one they mightthink I don't like or value them.”).

Finally, in the $75 conditions, participants based their justifications on both social norm and reciprocity to explain their decision to spend less than $75 in a gift. Figure 5 shows this balance. The same rationale behind the $25 conditions was seen here: according to their explanations, they seemed to feel an obligation to spend below $75, but not to reach $50 (“It would be nice to give back to this person a little, but I also should not feel pressured to exceed the established norm.”).

Discussion

The results of this study show that when people have to choose between reciprocity and social norms, people tend to be reciprocal. However, there may be some exceptional circumstances. Namely, people preferred to follow social norms instead of reciprocating when they had received a cheaper gift and when the gift exchange occurred privately. It means that when other people are not looking, it poses no problem to slightly increase the amount spent and give a better gift.

A limitation of this study lies in the fact that in the experimental procedure, people had to choose how much they would spend on a gift, but they did not have to think about what they would buy. In addition, despite having assessed the deviation from the established social norm -i.e. how much the chosen value deviated from the established price of $50.00 - our dependentvariable derives from the gift’s economic value. The literature on this topic has shown that thereare many other facets that are taken into consideration by the recipient, specifically, when anevaluation is made to give a gift back. Finally, even though Study 1 shed light on howconsumers choose between reciprocity and social norms, our results failed to show a clearseparation between social norm and reciprocity as mechanisms behind choice.

We then conducted Study 2 to address these limitations. Specifically, we aimed to validate our findings in a new scenario, in which participants had to choose between three different chocolate boxes to be given as a gift. In addition to this, we included a third factor that might influence this choice: whether the givers had appreciated the gift they had been previously given.

Liking a gift should influence this decision, since deviating from a social norm can lead to either gratitude or disappointment. Because people tend to reward generosity and punish opportunism (Sethi & Somanathan, 2003), we expected that:

H5: People will reciprocate to a cheaper gift when disappointed, and to a more expensive gift when grateful.

Study 2

We ran a web-based survey experiment using a 3 (past gift value: $25 vs. $50 vs. $75) X 2 (context: in public vs. private) X 2 (past gift reaction: pleased vs. displeased), between- subjects design. We did not include a “no information” condition, since we now know that participants in this condition behave similarly to those in the $50 condition. Six hundred North American subjects recruited by Amazon Mechanical Turk were randomly assigned to one of the twelve experimental conditions. All respondents were paid $0.20 to participate. The characteristics of the sample are as follows: 62.6% are male with a mean age of 30.7, 61% havea university degree and 38.2% earn more than $50.000 per year.

Procedure

The scenario described to participants was similar to that of Study 1, but with three exceptions. First, as mentioned earlier, we included a pleased vs. displeased condition. In the pleased (vs. displeased) condition, after reading the same scenario from Study 1, participants were shown the following sentence:

“You received a gift that costed $25/$50/$75 and you liked (vs. didn’t like) it.”

Second, because we changed our dependent variable, after reading the scenario, participants were told “This year you have drawn the same person who gave you a gift last year. You know that the person who you picked loves chocolate”. They were asked to choose one of the three chocolate boxes (see Figure 6). We considered choosing the $50 chocolate box as a proxy for following social norms, and the others as a proxy for reciprocity.

Lastly, for the sake of simplicity, we decided not to include the open question requesting justification for their choices. Therefore, after choosing one of the chocolate boxes, they were only asked a few demographic questions.

Results

We defined two dependent dummy variables for choice: reciprocity (which equaled one if the participant chose the box that cost the same price as the gift they had been previously given, and zero otherwise), and social norm (which equaled one if the participant chose the $50box, and zero otherwise).

We found that when social norms and reciprocity are aligned (i.e. $50 condition), a larger proportion of participants decided to reciprocate (75.9%) when compared to the $25 condition (35.6%) and to the $75 condition (37.9%; χ2(2) = 80.43, p < .001). We also found that a larger proportion of participants decided to reciprocate in private (54.1%) than in public (44.5%; χ2(1) = 5.56, p = .018). Finally, we did not find that the proportion of participants who decided to reciprocate differed when they were pleased (52.0%) with the previous gift compared to when they were displeased (46.3%; χ2(1) = 1.94, p = .163). Interestingly, the only situation in which there is a difference in proportion between liking the previous gift or not in the $75 conditions, both in public (54.5% among those who liked it vs. 18.4% among those who disliked it; χ2(1) = 14.47, p < .001) and in private (51.1% among those who liked it vs. 23.1% among those who disliked it; χ2(1) = 7.06, p = .008). Figure 7 summarizes participants’ choice to reciprocate in all experimental conditions.

Regarding our second dependent variable, which assessed the participants’ tendency tofollow social norms (i.e. choosing the $50 box), we once again found that when social normsand reciprocity are aligned (i.e. $50 condition), a larger proportion of participants choose the$50 box (75.9%) when compared to the $25 condition (58.9%) and to the $75 condition (52.6%;χ2(2) = 23.72, p < .001). There was no difference in the proportion of participants choosing the$50 box in private (59.6%) compared to in public (64.9%; χ2(1) = 1.82, p = .177). However, inthis case, being pleased with the previously given gift seems to impact their decision: when participants liked the previous gift, they were less likely to choose the $50 box (57.9%) thanwhen they disliked it (66.9%; χ2(1) = 5.17, p = .023). This difference is even more prominentin the $75 condition, both in public (36.4% among those who liked it vs. 65.3% among thosewho disliked it; χ2(1) = 8.68, p = .003) and in private settings (42.6% among those who likedit vs. 71.8% among who disliked it; χ2(1) = 7.39, p = .007). Figure 8 summarizes participants’preference to follow social norms in all experimental conditions.

We then used logit models to regress these dependent variables on the experimental conditions. Tables 2 and 3 summarize the results. To represent the different values of the previously received gift, we created two dummy variables: Condition $25 (which equaled one for the $25 past gift condition, and zero otherwise) and Condition $75 (which equaled one for the $75 past gift condition, and zero otherwise). We did not include a variable for the $50 past gift condition to avoid multicollinearity, thus using this condition as a control group (because this is the only condition in which there is no conflict between being reciprocal and following social norms). We also created a dummy for the different reactions toward the previous gift, (which equaled one when pleased, and zero when displeased) and a dummy for context (which equaled one for public, and zero for private).

able 2 shows the logit models on reciprocity, treated as the choice for the gift that cost the same price as the one previously received. Table 3 shows the logit models on social norm, treated as the desire to follow the rule established in the Secret Santa setting.

If people choose the price of their gifts based only on reciprocity, as H1 stated, we should expect two results: (1) there should be no difference among price conditions on the likelihood of choosing the box that costs the same as the gift they had been given; (2) there should be significant differences among price conditions on the likelihood of following social norms. Model 1 shows the main effects of the experimental conditions on reciprocity and Model 4 shows the main effects of the experimental conditions on social norms. We found a negative main effect of past gift information for both the $25 and $75 conditions on reciprocity, which shows that participants in these conditions were less likely to choose the gift that cost the same when compared to participants on the $50 setting. Interestingly, we also found a negative main effect of past gift information for both the $25 and $75 conditions on social norms, which shows that participants in these conditions were less likely to choose the $50 gift. Therefore, hypothesis 1 was partially supported.

H2 is the flipside of H1 and it states that people will choose the price of a gift based on social norms. Again, the negative main effects of the experimental conditions on both dependent variables in Models 1 and 4 shows that participants are likely to deviate from the price of their past gift, but they do not follow the social norm in the same proportion. Therefore, hypothesis 2 was partially supported. Together, they show that there may be some circumstances in which participants prefer to be reciprocal and others in which they prefer to follow social norms, which is consistent with our rationale.

H3 states that people are more likely to break social norms and be reciprocal afterreceiving a more expensive gift than a cheaper one. Although participants on both the $25 andthe $75 conditions showed a greater tendency to break social norms than participants on the$50 condition, participants on the $75 are as likely to be reciprocal as participants on the $25condition, OR =1.13, 95% CI (0.75-1.70), p =.55. Therefore, hypothesis 3 was not supported.

H4 states that in public, people tend to be more reciprocal than in private. Although we did not find a main effect of context on neither reciprocity nor social norms, therefore showing no support to this hypothesis, we found that for the $25 condition, people were less likely to be reciprocal (i.e. they chose a more expensive gift) in public than in private. This result suggests that having an external audience hinders the choice to reciprocate to a cheap gift, probably due to an impression management attempt.

Finally, H5 states that people will reciprocate to a cheaper gift when they feel disappointed, and to a more expensive gift when they feel grateful. This hypothesis again was partially supported. There was no interaction of past gift reaction and the $25 condition on neither reciprocity nor social norm. However, we found a significant interaction of past gift reaction and the $75 condition on both reciprocity and social norm. Specifically, participants on the $75 condition were more likely to reciprocate (and less likely to follow the $50 norm) when they liked the past gift.

Models 3 and 6 included all possible three-way interactions, none of which were significant. For this reason and because we made no predictions for them, neither will be further discussed.

Discussion

This second study disentangled the results from Study 1 showing in which conditions people are more likely to reciprocate and in which conditions people are more likely to follow social norms. Specifically, it showed that for deviations of previously received gifts below the social norm (i.e. $25 conditions), people preferred to reciprocate (i.e. to give a cheaper gift) when the exchange was conducted in private and people had been displeased with the previous gift. Whereas, for deviations above the social norm (i.e. $75 conditions), people preferred to reciprocate (i.e. to give a more expensive gift) when they had appreciated the previous gift, regardless of the exchange taking place in public or private.

General Discussion

An important aspect that givers take into consideration when choosing a gift is price. Surprisingly, the current literature offers very little explanation for how givers choose how much they would like to spend on a gift. When making this decision, the literature suggests that givers try to be reciprocal (i.e. paying a similar amount to that of a previously received gift) while also following social norms.

When a receiver is given a gift that was either cheaper or more expensive than expected based on social norm, does she/he reciprocate or conform to the social norm? In this paper, we attempted to provide answers to this question.

Our two studies shed light on an interesting phenomenon that takes place in gift-giving contexts. Together, they support the idea that people want to be reciprocal; nonetheless, under some circumstances, they prefer to conform to the social norm. Contextual factors such as theprice of a previously received gift and the appreciation for it, as well as the setting for the giftexchange (i.e. whether it takes place in public or private) seem to impact this choice.

One possible explanation for social norms playing a lesser role compared to reciprocity in this study lies in the fact that participants were not exposed to any commitment mechanisms to foster consistent behavior (Cialdini, 2007; for examples see Baca Motes et al., 2013). Since participants had no commitment signal prior to their decision, the average price rule may have lost ground to reciprocity, as expected in most gift exchange occasions.

Another possible perspective is to consider that following the social norm would hurt the giver’s money utility. Thus, those who are more rational would avoid the price rule socially imposed to preserve their financial standards over the benefits of being perceived as a good giver. Third, as the level of the relationship was not addressed, givers may have failed to focus on the relational aspect of the gift exchange.

An important contribution this paper offers is that it integrates the literature of reciprocal gift giving and social norms. We have supported the idea that people take into consideration the price of the received gift when deciding how much to spend on a gift. Our study went further, also showing some of the circumstances in which following social norm is preferred.

Even though these studies advance our knowledge in this topic, they face some limitations. The most important one is that our studies do not represent a spontaneous desire to give someone a gift. Consequently the “obligation” imposed by the Secret Santa rules may bias the buyer’s behavior. Future field studies with consequential dependent variables may address this limitation.

In addition, even though the literature suggests that people tend to choose gifts within a certain price range (Joy, 2001), our research design reduced other forms of reciprocity, such as creativity, surprise, etc. (Belk & Coon, 1993). Future research could investigate whether the characteristics of a gift other than price may solve the conflict between reciprocity and social norms in other ways.

Another limitation of our study is that we mentioned that the public gift exchange (vs private) was to be conducted among family members. Future studies could investigate if these results also hold true for gift exchanges among friends. Since the literature suggests that when shopping with friends, people are more likely to make unplanned purchases if compared with shopping with relatives (Luo, 2005), we believe that comparing both situations could provide interesting insight.

Moreover, our second study implied that the three boxes of chocolate are of the same type and quality, varying only price and quantity. However, participants were not explicitly told that information, so we cannot assume that all of them understood it. Therefore, this may pose as another limitation of the study to be addressed in future research.

Finally, we have contributed to the literature by showing how givers compromise between being reciprocal and following social norms when choosing the price of a gift, but we refrained from investigating the underlying mechanism of our findings. Future research may benefit from investigating how an impression management mindset influences price choice in public versus private settings.

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Additional information

How to cite the article:: Andrade, D. M. d, & Barros L. S. G. (2019). What should I do? The role of reciprocity and social norms on gift price’s choices. Revista Brasileira de Marketing, 18(3), 26-52.