Are people effective with gift gifting?

The aim of this thesis is to analyze people s effectiveness when gift giving based on various demographic factors and also on individual perception of each form of gift gifting. The key idea of this work is taken from analysis done by Joel Waldfogel (1993) who, based on data from a survey, proved that when giving material gifts the deadweight loss is created. As we do not know precise preferences of the gift recipient, if we disregard emotional value etc., the most effective gift is money. First, I am comparing already existent research in this area done by many recognized economists, then continuing with theory of expected value and expected utility. Ineffectiveness when giving material gifts is created because a donor picks a gift by its expected value for a receiver which is not equal to maximum expected utility. Next I am dealing with the deadweight loss, not only from the economic theory point of view but also with an overlap to the game theory. Based on my own questionnaire survey I proved that people are ineffective when gift-gifting. Significant factors are for instance specialization, education and importantly also personal preferences of a person in the role of a donor or a recipient. Respondents mainly prefer the ineffective form of gifts (material gifts or gift vouchers) rather than the effective form (money or gift cards). It was also confirmed that people are by 12 % more willing to accept money as a gift than give it to someone as a gift. Furthermore the survey proved that in case of gifting the deadweight loss is really created, and it is in the amount of 14 to 21 %