‘Tis better to give than to receive, but ‘tis best by far to give something that will make you look good in the eyes of the recipient — especially if you can save money in the bargain. Here’s one psychological finding that will help you choose cheaper gifts people will still appreciate: the less-is-better effect.

When you give people cash, they always appreciate more. But there are certain circumstances when people will prefer a less expensive gift.

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Back in 1998, psychologists gave subjects the chance to value certain items, and they found a clear trend. Give someone a set of dinnerware with 31 intact pieces, and a few broken pieces, and they like it less than a set of dinnerware with 24 pieces, none of which are broken. Give someone a big cup that isn’t quite filled with ice cream, and they will like it less than a cup brimming over with ice cream, even if the underfilled cup has 8 ounces and the overfilled cup has 7 ounces. Give someone a cheap but utilitarian $55 coat, and they will consider you more of a miser than if you give them a nice $45 dollar scarf.

There is a trick to it. Scientists had some subjects evaluate one item alone, and gave others the chance to compare the two. The people who got to compare the items noticed that the objectively more expensive, or bigger, present was more valuable. The less-expensive items were only rated more valuable when they didn’t have the chance to compare.

So get little boxes and stuff them full of homemade cookies and tissue paper—not spacious boxes that have plenty of room for the cookies. Get small items from expensive shops—not big ones from moderately-priced shops. This trick should work perfectly if you don’t let your friends make comparisons.

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Paper: Hsee, Christopher K. (1998) “Less is better: when low-value options are valued more highly than high-value options,” Behavioral Decision Making 11(2): 107-121.

Image: Petr Kratochvil