Download This Paper Open PDF in Browser

Here's Something You Never Asked for, Didn't Know Existed, and Can't Easily Obtain: A Search Model of Gift Giving

36 Pages Posted: 27 Jan 2001  

Todd R. Kaplan

University of Exeter Business School - Department of Economics; University of Haifa - Department of Economics

Bradley J. Ruffle

Wilfrid Laurier University - School of Business & Economics

Date Written: January 2007

Abstract

Gift giving is thought to be welfare decreasing. This claim rests on two key assumptions, namely, full information as to the whereabouts of all goods and the ability to reach the stores that carry desired goods costlessly. We replace these two assumptions with the more realistic assumptions of uncertainty about the location of goods and search costs. In contrast to existing economic models, gifts in our model are given only when they enhance expected welfare. In fact, the welfare improvement from gift giving is strictly higher than that from any possible equilibrium and gift giving survives the introduction of nearby specialty stores that have access to the same gift goods. We use our model to explain a number of stylized facts about gift giving in modern and foraging societies, the organization of retail trade and in-kind government transfers.

Keywords: Gift Giving, Search, Welfare, Retailing, Refunds

JEL Classification: A12, D01, D60, D83

Suggested Citation

Kaplan, Todd R. and Ruffle, Bradley J., Here's Something You Never Asked for, Didn't Know Existed, and Can't Easily Obtain: A Search Model of Gift Giving (January 2007). Available at SSRN: https://ssrn.com/abstract=257616 or http://dx.doi.org/10.2139/ssrn.257616

Todd R. Kaplan

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Exeter, EX4 4RJ
United Kingdom
+44 13 9226 3237 (Phone)

University of Haifa - Department of Economics

Haifa 31905
Israel

Bradley J. Ruffle (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
Canada

Paper statistics

Downloads
292
rank
90,266
Abstract Views
2,714