[s3r3nity]

> Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. > If X is less than the cost of a recall, we don't do one.

This is a reasonable expected value calculation - and not really that controversial. The real issue is that the model for cost isn't quite accurate; if you ask an actuary, whose livelihood is based on accurately measuring and accounting "risk," he/she will tell you that you would need to account for the probable loss in future revenues due to negative customer sentiment. Once you account for that, the cost of recall is a _much_ better proposition.

[pjmorris]

I know it's not good economics, but if you see a human life as priceless, the numbers don't work out quite the same. I think that's what 'Fight Club' was about. I guess the conversation departs the realm of economics at that point, and becomes one of philosophy and/or religion.

[jsmthrowaway]

I think I'd challenge the assertion that Fight Club in either medium was about human life being priceless (but I understand you probably meant the quote). Quite the opposite, I'd think.

[pjmorris]

Seems to me that the character, the author, and the audience find something tragic in a life measured only in calculation, and that they all think there ought to be more to life than what's apparent. 'Priceless' may be a stretch, I agree.

[oconnore]

If you've built an organization on numbers based decision making, you can no longer consider anything priceless, because an infinity (especially if there are two competing infinities) will cripple your ability to decide.

Companies run on strictly utilitarian ethics, which is why so many ethical complaints are invisible to them. For example: (Customer) ad tracking is bad for me! (Company) But tally the value of our services, we're clearly in the black!

[s3r3nity]

I would contend that those equations are a bit more nuanced than you give credit.

Let's say I hypothetically give you that the Customer sees ad tracking as "bad" (whatever that means ...let's just accept it for argument.)

(1) Then the [Customer] utility function is: (Value from free services) - (Negative experience from ad tracking) + (Possible positive experience from learning about a new product or service from better targeted ads)

(2) The [Company] utility function is: (Value from ad revenue alone) - (Negative feedback on ad targeting) + (Revenue gained from higher ROI on marketing spend resulting in more purchases/subscriptions/whatever.)

In (1), I think people on average don't care about "privacy" related news because users don't see the negative experiences outweighing the other parameters. In (2), the negative feedback on ad targeting isn't really that large at the [Company] level to warrant much change (at least if you leave the echo chamber of HN every now and then.)

In the case of Yahoo, I still hold the hypothesis that they underestimated the (Negative feedback on a breakdown in security) as well as (Positive revenue gained from trust in security.) Then again, I doubt myself because if this were true, Box would be lightyears ahead of Dropbox; sometimes the coefficient on UI _really is_ larger than that of security...?

[oconnore]

> In the case of Yahoo, I still hold the hypothesis that they underestimated the (Negative feedback on a breakdown in security)

Yahoo's stock is up (+53% since February, with a small dip in late June). Where is the miscalculation?

Volkswagen is back to positive sales growth, and their stock has recovered 50% since their discovery last September. Their calculation was correct, too.

[s3r3nity]

Ah good point - at least for Volkswagen...Yahoo has other confounding factors (their sale, etc.) but overall the impact is probably a short-term shock with few longer-term lagging effects.