I give all credit to this post to Professor Larry Iannocconne from GMU. Although, I had never had a class from him; listening to podcasts, his debate with Professor Caplan(GMU), and other sources helped me to understand the reason for giving gifts.
We spoke before upon the issue that gifts are not efficient. If you don't remember you can find it here. Now it is true that it is inefficient because we do not have perfect information; but what is it about the winter holiday season that gives it a name like "The Season for Giving"?
We have one season, one season for as individuals in a capitalistic society to break off time in order to help others. Why is that? Shouldn't we do it year round? And the thought of not giving presents on birthdays and holidays had simply left some with a foul taste in their mouths. Is it because they wished to receive gifts, or perhaps, the pure enjoyment of giving? It is actually more than selfish reasons of wanting to receive or give.
We give gifts in order to show others we care. It is inefficient upon the lens of individuals, but as a community, as a family. It unites the individuals to not look only upon themselves, but to others in hope of being something more. Some families do not need to give gifts because there is no need as they are already so close, but then there are those who live distant from one another, who once a year get a moment to unite and show that they care. The gifts are shared not necessarily to make yourself feel good or make someone else feel good, but to bring everyone closer, to build the community/family. We are social beings after all...