LAUSR

Abstract Gift giving is a complex emotional process that is important in maintaining relationships. However, little is understood about the effects of individual differences in consumers' ability to understand the emotions of the receiver and even themselves in the gift-giving process. A series of three studies reveal that emotional understanding (EU) influences how much money consumers spend on gifts. Study 1 shows that consumers with higher EU are likely to spend more money on buying gifts for others. Study 2 indicates that relationship closeness moderates the effect of EU on gift spending. Finally, Study 3 demonstrates that consumers with higher EU not only spend more money on gifts but also experience greater happiness. These results highlight the important role of EU on gift-giving behaviors and on the subsequent well-being of the giver.