Re:A skeptical response to Musk's hyperloop
by enko on Wednesday August 14, 2013 @12:01PM
(#6212273)
> why do they always happen to always be inaccurate on the bad side these days?
Well, an obvious factor is that there is a huge incentive to under-estimate for anyone with an interest in the project's green light. The cheaper a project looks on that initial paper, the more likely it will be approved, and if/when it goes over budget, what are they going to do? Cancel it with the tunnel half dug?
It's a political/societal problem of poor economic ideologies, lowest-bidder pricing and misaligned incentives, coupled with a low aversion to - or even understanding of - economic crime.
And it's by no means limited to these mega-projects. I know a certain software company who specialises in winning contracts by low-balling the price, expecting to argue it up later when all sorts of "unexpected" issues arise - those same issues the losing bids allowed for. Pretty much the same game.
Well, an obvious factor is that there is a huge incentive to under-estimate for anyone with an interest in the project's green light. The cheaper a project looks on that initial paper, the more likely it will be approved, and if/when it goes over budget, what are they going to do? Cancel it with the tunnel half dug?
It's a political/societal problem of poor economic ideologies, lowest-bidder pricing and misaligned incentives, coupled with a low aversion to - or even understanding of - economic crime.
And it's by no means limited to these mega-projects. I know a certain software company who specialises in winning contracts by low-balling the price, expecting to argue it up later when all sorts of "unexpected" issues arise - those same issues the losing bids allowed for. Pretty much the same game.