Deadweight Winters

In the 1993 American Economic Review article "The Deadweight Loss of Christmas," Yale economist Joel Waldfogel estimated that holiday gift-giving destroys between 10% and a third of the value of gifts. Reason? The best the gift-giver can do is to duplicate the choice the gift-recipient would have made on his or her own with the cash-equivalent of the gift. In reality, it's much more likely that the recipient will be worse off with the gift chosen by the gift-giver than if the recipient had made his or her own choice with the cash. PDF Here HT Carpe Diem

In the paper is prior assumption is that the gift giver is a worse shopper than the gift receiver, mainly for the ovious, the receiver knows what he/she wants. Implied in the priors? That the gift giver does not have countervailing special knowledge about supply.

My general claim about the winter holidays is that in the past they were all about supply, the traditions abound with the idea of hording goods for fewer, bigger feasts, classic winter slowdown, a supply thing. If I am in a German winter cooped up with a house full of kids, the local toy store may know a lot more about cheap games thru the winter than I. And the ability of the local grocer to plan for large shipments of turkey is utility I don't have.

In the modern Christmas, both givers and receivers are out shopping a much large array from fewer shipment concentrated over the holiday. Supply abounds over the period. It may just be that with sudden surge in supply, we are all better off learning about that and neglecting the issue of demand.