From Marina (via this) as to how come so much giddy enthusiasm for finely wrapped and adorned parcels beneath the tree:
December is upon us. Present buying needs to step up a gear if we are to avoid a last-minute flurry of panicked purchase decisions made in a marathon length relay between overwhelmed and under-stocked retailers.
The other advantage of getting one’s shopping done (relatively) early is the chance to start wrapping early. For how many people is Christmas Eve a day devoted to scissors, sticky tape, corners poking through too-thin paper and frustrations over the best way to wrap irregular shaped parcels of teddy bears, footballs and pogo sticks?
We buy gifts to show people we care. This greatly befuddles economists. They reason that as many people end up with things they didn’t much want everyone would be better off just receiving money instead. Chicago economist Richard Thaler, co-author of best-seller Nudge, concedes that economists’ advice is poor in this area when he observes “the best gifts are somewhat more luxurious than the recipient normally buys, consistent with the conventional advice (of non-economists), which is to buy people something they wouldn't buy for themselves.”
Economists may, however, provide some insight into why having laboured to buy presents, we labour further to wrap them. Unlikely inspiration comes from Nobel Prize winner George Akerlof’s celebrated 1970 paper ‘The Market for Lemons’. It is not about wrapping presents, nor, indeed, about lemons. It is about second hand cars and the role of asymmetric information.
In some exchanges one party knows more than the other. A second-hand car is a perfect example. You know every dink and quirk of your vehicle. The buyer does not. Consequence the seller is always in a better position than the buyer. This is asymmetry of information. When this asymmetry cannot be rebalanced with information it must be rebalanced with trust.
Gift-giving is the upside of asymmetry of information. The delight of giving a gift in part stems from that moment of finding out that we have succeeded in following Thaler’s folk wisdom and have bought a gift someone wouldn’t have bought for themselves. Wrapping a present formalises and heightens this moment. Who has not watched with expectation a loved one unwrap a gift? It is then we hope to discover we have shown that we know that person maybe a little better than they know themselves. Such empathy is a true act of friendship, generosity and love. It is something money can’t buy and worth the struggle with paper and ribbon to make perfect.
I'll admit I'm sucked in: