What makes a good gift? I've been asking people this question lately. I tell them that I don't mean specific items like cognac, sunglasses or one of my books (which are all excellent gifts). I'm looking instead for the basic characteristics of any good gift. One of the best answers I've gotten so far is this: "A good gift is something that someone really wants but feels guilty buying for themselves." This perspective is interesting because it suggests that the ideal gift is not something that the recipient can't afford or didn't know she wanted. It all comes down to alleviating guilt.

Behavioral economics offers some clues to this guilt-centric approach. Consider the following scenario, based on research by Dick Thaler: You are walking by a storefront and you notice a beautiful coat that is just the right cut and color. Up close it is even more beautiful. Then you discover that it is about twice as expensive as you had originally guessed. After 30 seconds of painful deliberation, you decide that you can't possibly justify paying so much for a coat.

When you get home, however, you find out that your significant other has bought you that same exact coat…using money from your joint checking account. Would you say, "Honey, this is very nice of you, but I have already weighed the costs and benefits and decided that this coat is not worth the money, so please take it back immediately"? Or would you say, "Thank you so much, I love it!" I suspect that the answer is the latter. Your significant other got you what you wanted without making you contemplate the guilt associated with the purchase.

Let's take this example one step further. Imagine that I own a restaurant and calculate that, on average, people eat 50 bites and pay $50. One day you come to my restaurant and I tell you that because I like you so much, I will charge you half price—only 50¢ per bite. In addition, I will charge you only for the bites you eat. What I will do is serve your food, stand next to you with my notebook and mark each bite you take.