"At its core, gift-giving involves risk, said Mark Osteen, an English professor at Loyola College in Baltimore. There is a risk in giving the wrong gift -- besides the financial loss that Waldfogel identified; there is the psychological loss of having the recipient conclude the donor does not know her very well.I think there's a general element in economics of ignoring complexity in order to model exchanges. If I get my ambition up, I'll blog on it.
But the understandable desire in modern American society to minimize the risk in gift-giving is paradoxically what is causing a devaluation of the gift's intangible qualities, Osteen said. In the tension between what makes economic sense and what makes psychological sense, the economic argument is winning. This is why people tell loved ones what they want for gifts, why donors include receipts, and why so many people exchange gift cards. All are ways to minimize economic and psychological risk."