Anthropologists describe gift-giving as a positive social process,
serving various political, religious, and psychological functions
(e.g., Boas, 1895; Mauss, 1925). Economists, however, offer a less
favorable view. According to Waldfogel (1993), gift-giving represents
an objective waste of resources. People buy gifts that recipients
would not choose to buy on their own, or at least not spend as
much money to purchase (a phenomenon referred to as ‘‘the deadweight
loss of Christmas”). To wit, givers are likely to spend $100
to purchase a gift that receivers would spend only $80 to buy
themselves. This ‘‘deadweight loss” suggests that gift-givers are
not very good at predicting what gifts others will appreciate. That
in itself is not surprising to social psychologists. Research has
found that people often struggle to take account of others’ perspectives—
their insights are subject to egocentrism, social projection,
and multiple attribution errors.