The Complexity of Value

There is one thing most of us have in common. In some way or another, we all consume something we place a subjective measure of value on. 


We shop in stores or online, we sell something to someone, or buy some thing or service from someone else. It ought to be a relatively simple task. I want something you have, and in exchange for that something, something else changes hands. Simple! In theory that is.


Transactional exchanges, in their simplest form are based on wants and needs. The transaction has value for both the buyer and the seller, and the very act of the transaction should ideally be an exchange of mutually agreed upon value. 


The crux comes when one tries to define the value proposition and the specifically defined and/or implied variables associated with value. The further remove one gets from a simple transaction, where one can clearly define the item for sale and what one is willing to pay for it, the more complex the transaction itself becomes. This is often because subjective expectations associated with value grow exponentially in relationship to the complexity of the service being purchased.


Take the simple transaction of buying a loaf of bread in the grocery store. It is pretty straight forward in that you can see the loaf and feel the loaf. You may even know subconsciously how it is going to taste, because you have had that brand of bread before. In paying the grocer for the bread, you each receive an agreed upon value from each other.


Now let's take the same transaction, but have it take place in a bakery or bread store. You smell the bread, see the crust and imagine what is is going to taste like, and its going to be great! Again, you agree to the transaction, believing that you will get exactly the value you expect. And then, its not quite as great as you thought it would be.


The two transactions are pretty simple and straight forward, but the latter includes a whole host of additional, subjective parameters. Maybe the crust wasn't as crunchy as you expected based on what you saw in the bakery. Maybe the loaf was softer than you thought it was going to be. Maybe it tasted just like the loaf you usually buy in the grocery store. It just wasn't right somehow, and now you feel somehow let down. 


The problem with value, and our expectations of value, is that they rarely are completely in sync. Most of the time, we accept this for what it is and move on, but what if we are unable to reconcile our dissatisfaction? How do unmet value expectations impact us and our relationship with the supplier? 


The more complex a transaction, the more opportunity there is for dissatisfaction because we all measure value differently. Perhaps, somewhere along the continuum from very simple to very complex, there is an area where subjective valuation is greater than at either end? 


To the consumer, a quart of milk is a quart of milk, and a controlled nuclear reaction is a controlled nuclear reaction. But are we satisfied with how the more mundane, less spectacular, but yet important transactions in our life play out?  


Guess that depends on how complex our definition of value is.


Agree? Disagree? Let me know your thoughts on this matter!