Our first Christmas as a married couple.

Oh, this is so romantic.

I think you're really going to like this.

Hello, my friends.

Oh, hi, Rhea.

Hey guys.

I am so sorry, Adam.

Just get on with it.

Wait, is he teaching you something?

Oh, no, we are the examples this time.

First, let's define economic value.

I'd rather drown.

The value of an object is the maximum amount that its owner would be willing to pay for it.

Or simply put how much it's worth to.

You, add all these amounts together and that's the total value of everything you've bought.

Emily.

I see that giant cardboard cut out of the rock is worth 100 bucks to you.

Oh, yeah.

But I only paid 50 for it.

Well, if it's worth 100 to you and you only paid 50 then in economic terms when you bought it, you literally created $50 in value.

You're 50 bucks reacher.

Oh, I feel wealthy.

Let's go to Vegas.

Gee Adam.

Thanks for this lesson in basic economics.

But what does this have to do with gift giving a whole lot actually?

Oh, who is that coming down?

The chimney.

Santa.

It's Santa.

I knew he was real.

No, it's economist.

Joel Waldfogel.

Wow.

Way less exciting.

Hey, Adam.

Hey, Joel.

Would you mind explaining to my sister Rio what the economic problem with gift giving is?

Sure when we buy gifts, we do so with the best of intentions.

But while we're really good at knowing what we like, we're pretty terrible at guessing what other people would value.

Oh, this is great.

What, what's wrong?

Well, usually I wear wrestling tank tops so I can show off my Jack's triceps, but it's the thought that counts.

Not economically.

Emily, how much would you pay for this shirt?

I'll wear it to bed.

So, I guess like, I don't know, 15 bucks I paid 50.

Well, Merv, you just destroyed $35 worth of value.

He might as well have set it on fire.

No, no, no, no, no.

Hi, I'm Adam Conover.

If you wanna see more, click here or here, I don't know what either of these are because they're gonna add them in post.

I don't know what the videos are.

They just told me in the script to do this.

This, here's a secret for you.

Hollywood's fake.

Everything's added in post.