Gift Cards and ‘Hyperopia’

Are you using gift cards as non-cash incentives within your organization? You may think that the recipients of these cards would be more likely to actually use them if provided more time in which to do so. However studies have shown that a faster expering gift card is more likely to be used. One such study by behavioral economists Suzanne B. Shu and Ayelet Gneezy, described in Virginia Postrel’s recent article in the The Atlantic, reached this conclusion. The explanation for this behavior is an internal conflict between a person’s self-discipline which is inclined to save and his more self indulgent side that seeks more immediate gratification.