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Hares and rabbits both have large ears. However, those of hares are much larger. In addition, these animals can move their ears to different directions as well as lower or erect them. Why are they so big and long?
They help them to hear and be alert
With these “large erect ears that move independently, rabbits can pick up sounds a mile away” like or better than a human being as well as hear higher pitches, i.e., their large and long movable pinna help them detect distant sounds from all directions.
Remember these animals are preyed by various predators including owls, hawks, lynx, foxes, coyotes, weasels and bobcats. Therefore, this is an adaptational trait, together with their strong and longer hind legs to help them to sense and quickly run, hop or bound away.
Besides being long, some of the hares and rabbits can move them to be able to hear any sound including faint one, i.e., they can tilt and rotate each ear by 270 degrees to detect the direction of the noise or sound. Also, they can detect two sounds simultaneously.
The hearing is very important to these prey animals and it is one of their most important senses. For instance, while hiding, they stick their long ears upwards to be able to hear the various sounds of their preys or any other thing in the nearby landscape.
Domestic rabbits will lower their ears downwards as well as backward when they don’t feel threatened and if they feel threatened or sense a possible danger, they will erect will be upright indicating they are trying to be alert.
There are also other ear positions which might mean different things such as being alert, stressed, not paying attention and so on.
They help in regulating body temperature
In hot climatic conditions, rabbits may find it difficult to cool down. Therefore, one adaptational feature is they large pinna surface area which has a complex and very dense blood vessel network as well as arteriovenous anastomose to allow them to carry a lot of blood to the ears and aid in thermoregulation.
For instance, when the temperature rises, the blood vessels on their pinna will dilate allowing more blood flow to this area and “as air blows over the veins in the ear, it helps to cool down the entire animal’s circulatory system when that cooled blood flows back into their body.” 
Also, the pinna has a little fur on the outside and inside and sometimes no fur on the inside to help further increase the efficiency of body temperature control and consequently avoid a heat stroke.
In case of heat prostration, you may notice their tongue, lip, and ears blue among other symptoms and besides keeping them erect, your pet may move them slowly back and forth.
During winter, the complex and dense blood vessel shrink to reduce blood flow to their pinna and thus minimize heat loss. This way, they can regulate their body temperature.
Finally, it has been noted that “hares living in cooler or mountainous regions (e.g. Lepus timidus, Lepus arcticus, Lepus americanus) have small ears.”. On the other hand, those living in a hotter and desert region including the Lepus californicus, Lepus capensis, and Lepus alleni, have bigger or oversized pinna.
What about the dwarf and lop-ear rabbits?
These breeds have been selectively bred to have smaller ears or loped ones and their function have been disregarded. These make them ineffective in doing their cooling function as well as hearing.
There are many legends and stories explaining how rabbits got long or big ears. Those are simply myths. The actual reasons are what we have discussed and not what you may have gotten from the various myths.