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The economics behind diamonds are better explained by an sociologist, not a geologist- the high cost and useless-ness of the gift are a feature not a bug! The b
by grw_ 5y ago
The economics behind diamonds are better explained by an sociologist, not a geologist- the high cost and useless-ness of the gift are a feature not a bug! The burning of significant amount of wealth is a costly signal of commitment to the receiver. I heard from a friend who worked at a diamond company (and as such could purchase stones with significant discount to market price) that his fiancée had specifically rejected the idea of receiving a stone from his company on the grounds that it being 'discounted' devalued the gesture.
- rjsw 5y agoEven if she could get a larger stone for the expected amount that the guy should spend ?
- grw_ 5y agoyes, I should have mentioned it was explicitly put to her in those terms
- gruez 5y ago>the high cost and useless-ness of the gift are a feature not a bug! The burning of significant amount of wealth is a costly signal of commitment to the receiver. So basically... proof of work?
- 988747 5y agoMore like "sunk cost fallacy".
- savanaly 5y agoNo, they're really different. Just because the sunk cost fallacy has something to do with spending money doesn't mean it applies whenever money is spent in an unwise way. https://en.wikipedia.org/wiki/Signalling_(economics) https://en.wikipedia.org/wiki/Signalling_(economics) https://en.wikipedia.org/wiki/Sunk_cost https://en.wikipedia.org/wiki/Sunk_cost
- 988747 5y agoBut buying a wedding ring is not only about showing off, it is an old method of psychological trickery that is supposed to make relationships and marriage more durable. It used to be "sunk cost" for a man, since until recently it was expected that if you break the engagement your ex-fiance would keep the ring (right now in most of the states law require it to be returned). Expensive wedding party is another sunk cost.
- mNovak 5y ago>> right now in most of the states law require it to be returned Is this true? That would be very surprising, as it is essentially a gift, or at the very least, joint property subject to divorce adjudication like anything else.
- xeromal 5y agoI love this
- jogjayr 5y ago> The burning of significant amount of wealth is a costly signal of commitment to the receiver. So why not buy something practical and expensive? Like a house or a car?
- grw_ 5y agoFor houses it's completely plausible that the motivation is for the asset to appreciate in value and even if the marriage ends in divorce, both parties end up being able to extract some value from it. For a retail diamond the purchaser is likely to see zero value recovered from it whether divorce happens or not. For cars, I suppose my hypothesis would say cars likely to depreciate very quickly (such as high-end SUV) are more suitable as engagement gifts than practical (prius or such), which fits roughly with my observations in real world
- astura 5y agoBecause houses and cars are useful, the GP pointed out that being uselessness is the entire point >the high cost and useless-ness of the gift are a feature not a bug The other thing is the marketing says diamonds are "forever," presumably like your love, but houses and cars require expensive maintenance and are easily damaged. Not good if you're buying something symbolic. Not that I personally agree, far from it, we didn't make any jewelery purchases when we got married.
- jogjayr 5y ago> The other thing is the marketing says diamonds are "forever," presumably like your love, but houses and cars require expensive maintenance and are easily damaged. Not good if you're buying something symbolic. Definitely some symbolism there. Relationships (romantic and otherwise) are indeed more like houses and cars - innately valuable, easily damaged, and requiring regular maintenance - than diamonds.
- astura 5y agoRight, I agree (and that's why I'm not "into" diamonds/useless trinkets) - but that's a realistic take, not the sort of thing people who are buying/receiving diamonds want.