This episode was originally released on December 21, 2010.
Gift-giving makes economists crazy. It's so inefficient!
So we wondered: Is there a way to make the holiday season both more efficient and more joyful?
On today's Planet Money, we try to answer that question by conducting a wildly unscientific experiment. We go into a seventh-grade classroom and give a bunch of kids some small gifts — candy, raisins, fig newtons.
Then we ask them how much they value what they got, and if they can think of a way to make everyone better off, without buying any more gifts. They quickly arrive at a solution: trade.
Behold, the power of economics!