Matt Yglesias writes about the irrational economics of gift-giving; for example, on average, gifts are worth less to the recipient than they are the market (Yglesias cites estimates from 10 to 33%). This apparently stupid custom makes us wonder what else is being maximized here. Thorstein Veblen wrote about conspicuous consumption (and gift-giving) as a form of status signalling, and used the pre-Columbian Pacific Northwest tradition of potlatch as an extreme example. Orgies of mutually ruinous gift-giving make perfect sense only if you're trying to impress people with your wealth. Asymmetric gift-giving can also make sense if it's an emotional experience you're trying to create, and it's starting or reinforcing a social relationship that will hopefully be of value to both parties; of if you're just looking for status from the giving of the gift.
Many of us explicitly tell family members that if there is anything to be given at the holidays, it's cold hard cash. Unlike that sweater you'll never wear, there's no loss there - it has the same value in your pocket as on the market. And indeed, direct cash gifts are the norm in some places in the world and even one region in the United States. New Yorkers give money at weddings; most Americans outside New York consider this crass. East Asians are more likely than Westerners to give money on holidays.
What is interesting here is that East Asian cultures have a rich tradition of gift-giving to reinforce relationships, but among family and close friends cash is acceptable or even expected. And it's worth asking whether we think of East Asians as better or worse rational optimizers (on average) than other groups of people, and whether New Yorkers as better or worse rational optimizers than other Americans. These folks might be on to something. So to your boss, take the time to think of something nice, but send your sister a cash card.