Bah, Humbug

the choice of the gift giver is a signal of intensity of search effiort

Cash is more efficient in a narrow sense, but holiday gift exchanges are about interpersonal relationships.

Clearly true if one ignores the pleasure one may get in choosing or receiving specific gifts. Only in some cases are these factors minimal.

Are you serious? Presents serve multiple interpersonal purposes. Revealed preference indicates that income transfer is not the primary one.

Depends on goal: may have goal (like create emotional connection through item - as if economists had emotions!) not achievable with cash.

Giving a present gives one an occssion to think about the recipient. The effort one puts into buying can be an important signal as well.

it's the thought (identifying the right present) that matters! In addition money lacks the surprise element.

Of course does not consider receiver's joy of giving, etc:

Gifts serve many functions such as signalling regard and demonstrating social ties with the recipient. Cash transfers don't do this as well

I don't want to be a scrooge!

This is the sort of narrow view that rightly gives economics bad name.

A large benefit is the pleasure of choosing something special for the receiver. Maybe one's hand-knit socks are more fun to give than cash!

"It is the thought that counts" has more truth than some allow. Gifts are more than things.

Implications of a specific gift (signal it sends, behavioral impact) may give additional utility to either the giver or receiver.

The act of giving or receiving gifts can add value to the gifts.

Instead of proposing to your wife w/diamond ring, you offer a gift card of equal value. Efficient--if you don't count your hospital bills.

generally agree but exposes neoclassical econ limitations bc it excludes utility from gift giver or recipient choosing/receiving a gift.

Giver informs receiver of novel experience. And (John Solow) giver can't enjoy directly, but only with participation of receiver (jewelry)
-see background information here

An assistant might prefer cash. For a friend a present that shows that you have thought about what matters to them might mean much more.

Recipients often want to know that the giver spent time thinking about the gift and acquiring it. Giving cash is too easy in their eyes.

In some cases, non-pecuniary values are important, but in general, the statement is true.

Motivation for the present has to be non-monetary -- but try giving your spouse cash!

I know the argument (see link), but a costly signal can be worthwhile.
-see background information here

Only an economist could think like this.

Disagree because the value is the thought behind selecting the present, not the cash involved. So true for thoughtless presents.

The judgment would seem to depend on the giver's motivation.

Gift giving is a form of communication. Comparing the gift to what the recepient would purchase with cash misses the esssence of gifts.

Generally, of course. But shopping takes time, and some gifts you would never have shopped for turn out to satisfy unsuspected preferences.

Balderdash. This narrow notion of "efficiency" -- and what life is about -- gives economists a bad name. Here's to the winter solstice.

Many reasons why gifts may be better than cash. Signaling thoughtfulness. Specialized knowledge of giver. Gifts from travels...

For many (most?) gifts, "efficiency" is not the point.

Is this a trivial price theory quiz or an interesting behavioral question.? To test price theory, try a cash gift next Valentine's day.

Bah, humbug. Such a claim takes an oversimplified model too seriously. Gifts can serve many purposes.