The point of the diamond is to be a costly signal of commitment. In order to be a good signal, the shiny rock has to be useless.
Not quite. Don’t forget that the guy gives the diamond to the girl. It becomes her property—there is a transfer of value ($) happening.
One of the signals there is “Look how large/expensive a rock I can afford” (which doesn’t require the rock to be useless) and another signal is “Look how much value I’m willing to give to you just in exchange for your goodwill and favour” (which also does not require the rock to be useless).
It’s a signal on both sides. She accepts the rock rather than telling you to give her x thousands of useful goods to show that what she wants from the process is commitment, not money.
Not quite. Don’t forget that the guy gives the diamond to the girl. It becomes her property—there is a transfer of value ($) happening.
One of the signals there is “Look how large/expensive a rock I can afford” (which doesn’t require the rock to be useless) and another signal is “Look how much value I’m willing to give to you just in exchange for your goodwill and favour” (which also does not require the rock to be useless).
It’s a signal on both sides. She accepts the rock rather than telling you to give her x thousands of useful goods to show that what she wants from the process is commitment, not money.