Monday, December 26, 2005

Christmas Gifts

In recent years, I have not been a happy recipient when opening gifts because the economics of gift giving saddens me. My main opposition is that there is no so-called “efficient gift” in the any exchange. Never will there be a gain in utility from a gift exchange. There can only be “0” or no gain in utility and this exchange is often in the form of money. With money, the recipient can use the gift in the most efficient manner to serve their needs. Whereas with gift certificates, the recipient is constrained to a particular store/set of stores and does not allow the recipient to serve their core interests. Other possibilities where utility may not be lost are when an individual finds an extreme deal and due to imperfect information an individual may not have made a transaction. Another possibility is when a long-distance relative or friend sends or brings a regional item or a gift not available in your area. An example is a friend brings you a Dave Matthew’s Band t-shirt (that they got at a concert) or my grandma bringing Seroogee chocolates from eastern Wisconsin. These gifts are efficient in the sense that the recipient may not have access or strong access to a particular gift.

Given that gifts in most cases bring a loss in utility for individuals across the US, I have a tough time sitting around the Christmas tree opening presents. So instead of thinking about the loss in utility in the micro-level (my family) and the macro-level (the United States and other nations that celebrate Christmas), I try to focus on God and his gift in his own son, Jesus. Ignoring economics, there are a number of things that makes God’s greatest gift to us so awesome. This gift and any gift have 5 main characteristics (props to Dad for the outline):

An Expression of Love

Romans 5:15 (NIV) ….how much more did God's grace and the gift that came by the grace of the one man, Jesus Christ, overflow to the many!

To a sinful world, God did not have to send his son. Yet, God did send his son to defeat sin and give everyone the freewill to accept the love of his son.

Meets a Need

Romans 5:16 (NIV) Again, the gift of God is not like the result of the one man's sin: The judgment followed one sin and brought condemnation, but the gift followed many trespasses and brought justification.

God met the need through his son because of man’s “many trespasses” or sins commit throughout his/her lifetime. The fact is that an individual cannot earn salvation or a relationship to God by our own willpower, goodness or righteousness. We need God and the gift of his son Jesus met this need.

Lasting Value

Romans 5:21 (NIV) …so that, just as sin reigned in death, so also grace might reign through righteousness to bring eternal life through Jesus Christ our Lord.

The implications of accepting the life, death, and resurrection of Jesus Christ not only are of extreme importance in this world but the life to come in heaven. While gifts received this Christmas will only be last a limited time on this earth, the gift of Jesus is forever for those who believe (according to Revelations and the rest of the New Testament).

Costly Sacrifice

Romans 5:7-8 (NIV)

Very rarely will anyone die for a righteous man, though for a good man someone might possibly dare to die. But God demonstrates his own love for us in this: While we were still sinners, Christ died for us.

Jesus’ bore the ultimate price of a painful death and execution on the Christ. Obviously, other people on this earth have led painful deaths too. But, Jesus’ was truly not guilty and was never guilty of a sin in his lifetime even though a mortal human being. He also had the ability to avoid his death but clearly he knew that this was his ultimate mission, to be a human sacrifice for humanity.


Romans 5:1 (NIV) Therefore, since we have been justified through faith, we[a]have peace with God through our Lord Jesus Christ..

The relief and euphoria one feels when accepting Jesus into your life is not only life-shattering and mind-blowing but also a surprise. When an individual begins to trust in the God of Abraham and biblical values rather than on themselves and religious/secular values, he/she will be surprised on how their outlook and perspective on life changes.

*I hope that you can celebrate the gift of Jesus and all other minor gifts this Christmas and Holiday Season. The analysis is short (a much longer dialogue could have be added) and if anyone has any questions please comment.

**I am not criticizing gift giving as a whole and I still like to give/receive gifts. I think that there definitely is something besides the pure transaction of giving/receiving gifts. From a purely economic standpoint, it does bother me to a point.


  • I really liked your first paragraph. I think about that a lot actually.

    I was joking with a friend about giving wal-mart gift certificates for the following reasons...
    1. Cash is not an acceptable holiday gift... it needs to be earmarked for something.
    2. With constraint (1) in mind, a Wal-mart gift certificate is the closest possible thing to cash, because of their selection.

    Jolly idea, huh? :-)

    By Blogger Mark Murphy, at 3:05 AM  

  • According to Prof. Nesper in Anthropology 100, gift-giving is largely an affair of selfishness. Individuals give gifts because they see some benefit for themselves in creating or maintaining the relationship with the recipient.

    While I don't subscribe to this conception, it's a different perspective on your opening paragraph economic quandary.

    By Blogger Brad V, at 1:01 PM  

  • I must say I've never thought about the econmics of gift-giving before. But I'm not sure it is always true that gift-giving is either a net loss or 0 gain. First, the intention of Christmas gift-giving is to bless those around you. Whether or not you are successful in this, there is usually an intrinsic benefit to giving. Thus, presumably, merely the act of giving is an increase in utility. Second, sometimes people get things they really want but might never have thought of on their own. This value may outweigh any giving that is done. Third, from a monetary perspective, many people will receive out of proportion to what they give, which is a net plus for them.

    I'm sure there's more to this, but these preliminary thoughts, especially point #1, tell me that gift giving ought to always be a net positive in utility.

    By Blogger Brian Hagedorn, at 5:08 PM  

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