Constraining the Unconstrained: Why Consumers Give Less Versatile Gifts to Unconstrained Recipients

Abstract

<p>People spend over $573 billion annually on gifts (Wonder 2020). In doing so, they often base their selections on knowledge about the recipients, such as their culture (Green & Alden 1988) and preferences (Aknin & Human 2015; Gino & Flynn 2011). In the current research, we investigate an understudied aspect of gift giving: how the recipient’s financial situation affects the giver’s selections.</p><p>Consumers can readily detect people’s financial situations (Kraus et al. 2017), which leads to inferences about their preferences (Monisaivis & Drewnowski 2009; Snibbe & Markus 2005). We examine how the recipient’s financial situation influences the type of gift the giver selects, specifically focusing on the distinction between versatile and non-versatile gifts.</p><p>A versatile gift is a product that can serve many functions or be used in many contexts (e.g., all-in-one coffee machine). Conversely, a non-versatile gift is a specialized product that has less functions or is used in fewer contexts (e.g., espresso machine). We propose and find that consumers see non-versatile gifts as being of higher status than versatile ones.</p><p>We predict that when the gift recipient is financially unconstrained (constrained), the giver will be more (less) likely to choose a non-versatile product (i.e., martini glass versus general cocktail glass), even when prices are equivalent. We hypothesize that this effect is driven by the desire to give something of higher status (e.g., a product that confers social prestige to the owner; Berger & Ward 2010) to the financially unconstrained recipient. We theorize (and show in a supplemental study not described for brevity) that givers will only make the association between status and non-versatility for products that are already viewed as having potential status at baseline, whereas for products with lower status at baseline (e.g., a drip coffee machine), givers are less likely to make this association.</p><p>In study 1a (all studies pre-registered), we examine our hypothesis using a 3-cell design (recipient’s finance: unconstrained, constrained, control). Participants first wrote about a friend that was either financially unconstrained, constrained, or about a friend’s general characteristics (control). Then, participants chose between either a pre-structured notebook (non-versatile) or a notebook with an open layout (versatile) as a gift for their friend (gift price held constant in all studies). Studies 1a and 1b were incentive compatible in that participants were told some winners would be chosen to have their selected gift sent to the recipient on their behalf. We find that 46.4% in the unconstrained, 26.2% in the constrained, and 27.3% in the control conditions chose the non-versatile gift. Using a binary logistic regression, we find that those who chose for an unconstrained recipient were significantly more likely to pick the non-versatile gift compared to those who chose for a constrained recipient (β=.89, SE=.30, Wald-χ2(1, N=299)=8.65, p=.003) and to the control condition (β=.84, SE=.30, Wald-χ2(1, N=299)=7.57, p=.006). There was no difference between the constrained and control conditions (β=.05, SE=.32, Wald-χ2(1, N=299)=.03, p=.86).</p><p>Study 1b replicates these results using gift cards. Participants chose between a $50 gift card to a specific store (non-versatile) or a $50 Visa gift card (versatile) for a financially constrained or unconstrained friend. We find that 32.0% of those who chose for an unconstrained friend, and 16.2% of those who chose for a constrained friend, chose the non-versatile gift (β=.89, SE=.24, Wald-χ2(1, N=401)=13.32, p<.001).</p><p> Study 2 uses a 2 (role: giver, recipient) x 2 (recipient’s finance: unconstrained, constrained) study design to investigate whether preferences and choices match between givers and receivers. Givers wrote about a friend who was financially unconstrained or constrained. Receivers wrote about feeling financially unconstrained or constrained themselves. Then, participants were told to imagine they were either planning to purchase a gift for the friend (giver) or expecting to receive a gift from a friend (recipient). Finally, participants chose between either a martini glass (non-versatile) or a general cocktails glass (versatile) for their friend/themselves. We find a marginal interaction between gift role and recipient’s finances (β=.39, SE=.23, Wald-χ2(1, N=399)=2.98, p=.08). Replicating prior findings, we find that givers were more likely to choose the non-versatile gift for unconstrained recipients compared to constrained recipients (β=.38, SE=.15, Wald-χ2(1, N=399)=6.19, p=.01). However, we find that recipients in both the unconstrained and constrained conditions preferred the versatile gift to the non-versatile gift (β=.007, SE=.17, Wald-χ2(1, N=399)=.002, p=.97). Lastly, we find a significant mismatch between givers and recipients in the unconstrained condition, such that givers were more likely to choose the non-versatile gift than recipients would like (β=.80, SE=.31, Wald-χ2(1, N=399)=6.65, p=.01).</p><p>We test for mediation through desire to give a gift of higher status in study 3 (2-cell: unconstrained, constrained). Participants chose between an espresso machine (non-versatile) or an all-in-one coffee machine (versatile) for a financially unconstrained or constrained friend. We find that 32.0% of those in the unconstrained, and 16.2% of those in the constrained conditions, chose the non-versatile gift. Those in the unconstrained condition were more likely to choose the non-versatile gift compared to those in the constrained condition (β=1.61, SE=.35, Wald-χ2(1, N=197)=21.73, p<.001). We also measured givers’ desire to give something of higher status, finding that it mediates the effect of financial situation on gift choice (ab=.92, 95% CI [.4457, 1.5783].</p><p>We provide further evidence for the mechanism via moderation in study 4 (2 (recipient’s finance: unconstrained, constrained) x 2 (gifts framing: control, status)). Participants chose between a martini glass (non-versatile) or a general cocktails glass (versatile) for a financially unconstrained or constrained friend. We then manipulated the gift descriptions such that they were either similar to prior studies (control) or we added information that the versatile item was limited-edition to boost its perceived status. We find an interaction (β=1.11, SE=.57, Wald-χ2(1, N=402)=3.75, p=.05), replicating effects with the control framing (p=.002) but see an attenuation with the status framing (p=.74).</p><p>In conclusion, we find that knowing that the recipient is unconstrained (constrained) financially leads givers to choose less (more) versatile gifts, mediated by givers’ desire to give something of higher status. In doing so, our work contributes to the research on gift-giving, financial (un)constraint, and product status and versatility.</p>