As it is Christmas Day, today’s topic will be Christmas-themed. Although the question might seem light-hearted, it shows how economics can be used to inform us on any social question.
I believe that the main point of gifts is the social message they send - 'I value our bond' or 'I would like to have a bond with you'.
Asking people to monetarily evaluate their gifts seems like a fundamentally flawed idea - self made gift from a child to its parent, will obviously have very little value on an auction, but to the parent, it could be priceless. When such a parent is asked what this gift is worth to them the most likely answer 'oh i would never sell it', but when asked how much money it would be worth on an auction, they would know (and most likely say) that it would not be much.
Also, some gifts can be 'worth' more to the receiver, even if they cost less than other gifts. For example, a pair of warm socks could bring someone (who has cold feet, presumably) much more joy than a pretty wall clock, even though wall clock cost more.
Also, if someone recieves some very lavish gift, it might be awkward for them - making the gift actually unpleasant, making it have negative 'worth'. Or a badly misguided gift - recipient of something they could be allergic to would be really annoyed to receive something that would poison them from their spouse. The 'poisonee' would know that the gift is worth X dollars, but that would not make it a joyous present.
In conclusion, I think these experiments were 'fun' but didn't really make sense - they attempt to measure something that is a mere after thought of the main event, as the perception of monetary value of the gift, is (usually) not the point of exchanging gifts.
Yes, I agree that the issue of establishing the specific value of gift giving is a difficult exercise (even impossible) where many methods will fail (although the methodological pursuit of trying to do is quite important in other contexts - such as public auctions). I do think that the auction mechanism described in one of the experiments is quite a good way to get the true value of the gift recipient (one minor issue is that it does not include the effort to potentially get a replacement of the gift). And I do agree with the bond signalling - that is where a lot of the value gifts comes from.
Generally, the main point of these exercises was to establish the sign of the effect - i.e. does gift giving generate value (in natural contexts) or does it destroy value. These studies so far show the tendency for gifts to be positive for society. Although it might feel intuitive/obvious, what I found surprising is how many news articles and economists argue the opposite (mainly by ignoring the further developments in the question). Some of them repeat that gifts are bad every holiday season, even though we would be all clearly worse off (whether by 5% or 30% - that's another question).
All these experiments feel like trying to measure the lenght of a color[https://en.wikipedia.org/wiki/Color].
I believe that the main point of gifts is the social message they send - 'I value our bond' or 'I would like to have a bond with you'.
Asking people to monetarily evaluate their gifts seems like a fundamentally flawed idea - self made gift from a child to its parent, will obviously have very little value on an auction, but to the parent, it could be priceless. When such a parent is asked what this gift is worth to them the most likely answer 'oh i would never sell it', but when asked how much money it would be worth on an auction, they would know (and most likely say) that it would not be much.
Also, some gifts can be 'worth' more to the receiver, even if they cost less than other gifts. For example, a pair of warm socks could bring someone (who has cold feet, presumably) much more joy than a pretty wall clock, even though wall clock cost more.
Also, if someone recieves some very lavish gift, it might be awkward for them - making the gift actually unpleasant, making it have negative 'worth'. Or a badly misguided gift - recipient of something they could be allergic to would be really annoyed to receive something that would poison them from their spouse. The 'poisonee' would know that the gift is worth X dollars, but that would not make it a joyous present.
In conclusion, I think these experiments were 'fun' but didn't really make sense - they attempt to measure something that is a mere after thought of the main event, as the perception of monetary value of the gift, is (usually) not the point of exchanging gifts.
Yes, I agree that the issue of establishing the specific value of gift giving is a difficult exercise (even impossible) where many methods will fail (although the methodological pursuit of trying to do is quite important in other contexts - such as public auctions). I do think that the auction mechanism described in one of the experiments is quite a good way to get the true value of the gift recipient (one minor issue is that it does not include the effort to potentially get a replacement of the gift). And I do agree with the bond signalling - that is where a lot of the value gifts comes from.
Generally, the main point of these exercises was to establish the sign of the effect - i.e. does gift giving generate value (in natural contexts) or does it destroy value. These studies so far show the tendency for gifts to be positive for society. Although it might feel intuitive/obvious, what I found surprising is how many news articles and economists argue the opposite (mainly by ignoring the further developments in the question). Some of them repeat that gifts are bad every holiday season, even though we would be all clearly worse off (whether by 5% or 30% - that's another question).