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Re: [Phys-L] microeconomics



On 05/05/2015 12:56 PM, Bernard Cleyet wrote:

I don’t think all of the development cost should be included in the
loss, as some available for future use. [1]

Partially correct idea, but wrong as to details.

Whatever fraction of the /development cost/ that is
reusable after failure would have been /at least/
as reusable after success. Basic microeconomics
and basic accounting principles forbid that sort
of selective amnesia.

Alternatively, figure out whatever hardware
and/or intellectual property you wanted to
re-use, and make a two-column business case.
In one column, calculate the efficient way of
getting what you want. In the other column
calculate the cost of crashing a spacecraft
on Mars. The difference is the net cost of
the screw-up.

There are several ways of calculating the
details, but it's gonna be several hundred
million dollars no matter what.

I presume not idiosyncratic.

Proposition [1] is the mirror image of "sour grapes".
It is the Chaplinesque "shoe leather is delicious"
argument. Scoundrels have been using this since
the dawn of time ... but that doesn't make it any
less scoundrelly.

-----------

By way of contrast, you "might" be able to ask
for a refund on some fraction of the allocated
/operating budget/. I'm not sure, but reading
between the lines I suspect the 43 million dollar
line item corresponds to the planned six year
mission, and only part of it was spent before
the mission was cut short.
http://mars.jpl.nasa.gov/msp98/orbiter/fact.html

Or maybe all 43 megabucks was spent. I don't
know, and I don't feel like researching it.

For this reason, just now I modified my web site
to say "several hundred million dollars" rather
than any more specific figure. That suffices
to make the point about keeping track of the
units.