Most of us put very little thought into buying gifts for our friends. For some reason people seem intent on buying me ties and cufflinks. People: I appreciate the gesture, but I am an Internet entrepreneur. I wear jeans and t-shirts. I can’t recall in what year I last wore either of those things! Similarly, my female friends seem to receive flowers and chocolate. Those are somewhat useful, but very impersonal. The same is true for bottles of wine which are also used as a standby gift for both sexes.

I realize it’s actually hard to buy gifts for adults. We have almost everything we need. We buy ourselves the things we want. Moreover, knowing what our friends like does not necessarily help. For instance, you may know I like video games, but you can’t know what games I already have or am really interested in.

The solution is to buy people experiences aligned with their interests. Then the options are endless. In my case, I would be delighted to receive a massage at a spa, tennis lessons, theater tickets, gliding lessons, helicopter flying lessons, sessions with a personal trainer, martial arts lessons … the list goes on!

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  • The problem is that experience gifts require work on the part of the receiver to enjoy and hence can sometimes be an actual burden. But they experience gifts do have the advantage that they don’t take up space over the long haul.

  • The thing about gift giving, is that you have to find a gift where the utility the person gets from the gift is higher than the utility they would get from spending the cash on something else.

    Which means you have to:

    1) Find a gift where your cost of getting it is less than their cost of getting it (e.g., me picking up the copy of the economist for you that didn’t come in the mail, or giving someone a book or DVD you think they’d enjoy but they probably wouldn’t discover on their own)

    2) Find a gift where the utility is very high, but for some reason if they bought it for themself the utility would be lower

    So one of my all time best gifts ever was for my friend Michael, who used to live at 150 and Riverside Dr. I gave him vouchers for two cab rides home on me.

    His utility from getting the rides himself would be lower, because there would be the temptation to do it on a consistent basis, which he couldn’t afford.

    Then again, I think mothers are universally the worst gift givers ever.