What should I do? The role of reciprocity and social norms on gift choices

Abstract

Objective: The purpose of this paper is to investigate how individuals resolve a conflict between reciprocity and social norms when choosing the price of a gift, and to investigate whether gift exchanges conducted in public or private and people’s appreciation for past gifts play a moderating role in this decision.Method: We ran two web-based survey experiments.Main results: Results showed that when people must choose between reciprocity and social norms, people tend to be reciprocal. However, there are some exceptional circumstances: people preferred to follow social norms when they received a cheaper gift in public, and when they were displeased with a prior expensive gift.Contributions: These findings help shed light onto how people make price decisions when choosing a gift.Relevance/Originality: Understanding price decisions in the gift-giving context is surprisingly an underexplored topic in the marketing literature.Managerial Implications: Understanding how people make price choices is important to practitioners. For instance, retailers can adjust their assortments to offer products across different price ranges, and sales people can make better offers to customers based on how much they are willing to spend.