The power of monetary and nonmonetary business gifts: a regression discontinuity approach

In this paper non-­‐monetary and monetary gift exchange in a business environment by means of regression discontinuity is studied. The data was accessed from a medium-­‐size travel agency. The travel agency gets involved in a lot of promotional activities for its clients, differentiating between monetary and nonmonetary gifts. A recent development has been a special hardcover brochure for its most loyal clients as a token of appreciation. The reciprocity of the clients to the gift is measured by assessing the number of bookings following the gift and comparing with the groups which did not receive a gift. In addition, a difference between the effectiveness of the gift was assessed with respect to different gender. Finally, this nonmonetary gift was compared to the effectiveness of monetary discounts. The results indicate lack of reciprocity regarding non-­‐monetary promotion; also no effect has been found for women. Monetary promotion, however, turned out to be effective even though the comparison groups for the regression discontinuity were very similar, hence the most reliable. Some of the results lack statistical significance; but might provide some insight into the process of gift exchange in a business environment.