How to pick the perfect present

I had always attributed it to bad luck in the genetic lottery. I am three-eighths Welsh and a quarter Scottish, which is a rotten mixture: part Cavalier, part Roundhead. This means that every pleasurable experience I have in life is coloured by Calvinist guilt: in the remote likelihood that I were ever to find myself sitting in the grotto in the Playboy Mansion, my Welsh part would enjoy it while the Scottish part would be worrying about how much it cost to heat.

But it seems this guilt problem is nothing to do with my ethnicity: no human brain is remotely monolithic, but a bundle of conflicting modules cobbled together over millions of years of evolution. Very few decisions reduce to a simple question of cost versus benefit; instead, in every decision we encounter a weird mixture of guilt and anxiety and concepts of fairness and reciprocality inherited from earlier primates.

In the 1980s the behavioural scientist Richard Thaler invented an ingenious thought experiment. People were asked to imagine that they were on a deserted beach on a hot day. They have been there for a few hours and are seriously thirsty. A friend has spotted a place selling beer a few hundred yards in the distance and announces that he’s just off to fetch a bottle of beer for himself and can bring one back for you: ‘Let me know how much you are willing to pay for a chilled bottle of Heineken from that beach shack over there,’ he explains. ‘If the price is below your stated maximum, I’ll buy it. If it’s higher, I won’t.’

The typical answer, in 1980s dollars, was $1.50. Nothing surprising in that. What was strange was that, if you replaced the words ‘beach shack’ with ‘boutique hotel’ for a random selection of the people to whom you asked the question, the average price those people were willing to pay rose to $2.65.