It's the holidays, a time of merry making and a time of giving. And with parties happening left and right, giving gifts is a common sight. But with gift-giving comes the age-old problem: what to give.

But before getting a loved one a present, a study done Kimberlee Weaver, assistant professor of marketing in the Pamplin College of Business, along with coauthors Stephen Garcia and Norbert Schwarz of the University of Michigan warn that getting an expensive gift and spending whatever is left of the budget on a cheap add-on could degrade the overall effect.

Researchers called this the "Presenter's Paradox," which arises because gift givers follows the notion of "more is better," while gift recipients evaluate the overall package. Further explaining this, Weaver said that when evaluating a gift package, people follow an averaging strategy which can lead to less favorable judgments when mildly favorable pieces, such as add-ons, are added to highly favorable pieces.

Simply put, adding a little gift to a big gift changes the perception, making the big gift less desirable.

Having the paradox, Weaver said, sheds new light on how to best present something. Researchers noted that this paradox is applicable to different aspects, going on as to say that whether it is a music producer considering which songs to include in a music album, or a legal team building up arguments for a case.

The Gift of Etiquette

But on the topic of receiving gifts that maybe less than desired, how should people react? According to Giftypedia.com, there are certain etiquette rules to follow to courteously deal with the whole gift-giving affair.

First thing that should remembered is the fact that the person who gave the present is only thinking of the perfect gift for the recipient. Next thing of note is that when receiving the gift, it is important to say "thank you" in person whenever possible.

Even when opening the gift at a latter period, expression of gratitude must be observed. And when the recipient does receive the gift at a different time, a thank you-note would be most appropriate.

After opening the gift and seeing that the actual present is not to the taste of the recipient, it is important not to show a sense of distaste on the expression of the face.

When receiving a gift is either delivered or mailed, it would be proper to notify the gift-giver that the present has been received. In expressing gratitude towards this kind of gift-giving, a hand-written note would suffice.

And if these tips cannot be remembered, watch the following video and keep in mind that this is NOT the right way of receiving gifts. Enjoy!