A student in another negotiation course posted the following message. I think it is particularly pertinent given the water scarcity we all face. I, personally, have lost 12 trees over time to drought. What do you think? After reading the information regarding scarcity, it reminded me of this paradox we learned about in our Economics classes.This paradox represents the true strength of the scarcity principle.We cannot, as living beings, survive without water.Our existence would literally stop within days, if water was not available.However, our world could easily continue to exist without one single ounce of diamond.

The paradox of value (also known as the diamond-water paradox) is the contradiction that, even though water is more useful in terms of survival, than diamonds, diamonds command a higher price in the market.The diamond-water paradox poses the perplexing observations: Even though water is obviously important to human activity (life cannot exist without water), the price of water is relatively low. However, diamonds are clearly much less important to human existence, but the price of diamonds is substantially higher.In other words, the utility obtained from water is obviously very great, while the utility obtained from diamonds is substantially less.

Diamonds are obviously much more expensive & sought after because of the availability (& clever marketing).Water is seemingly abundant (although becoming more scarce each day), so it's not seen as valuable, although it a critical factor of life.

What are ways to reverse this paradox?I think if we don't, we could be in a rude awakening sometime in the near future.