Monday, November 15, 2010

Cost of a Smile

Recently someone updated their Facebook status with a question -
A sweet smile costs nothing. Does it?
Here are my thoughts on it - 

Suppose a smile costs nothing and everyone knows it. By default , everyone smiles at every one else. In such a scenario, the smile will have no value for the person receiving it - since he knows that to the smiler it costs nothing and everyone smiles at everyone else by default. Basically, it means that sending the same signal all the time is sending no signal at all. 

But, this is not the case. People assign a non-zero value to a smile, so it must cost something to the one smiling. And that cost is the Opportunity Cost of smiling. i.e. the value one would have gained had they not smiled. This value can be positive in many cases. e.g. the cost of smiling at everyone on the streets of a city like Delhi can be quite huge - especially for girls. 
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2 comments:

Aish said...

Intelligent post but have you used value and cost inter-changeably? I mean smile does not cost anything but it is of value. Cost and value are not the same and maybe that explains this situation.

Sachin Tyagi said...

Aish, I used the evidence that a smile is valued to argue that it also costs something. They are still separate concepts but one (value to receiver) is used to argue for the existence of other (cost to the smiler).
And to an extent both are inter-related; money has value precisely because it costs effort to earn it. If it were free available, it wouldn't have any value. :)