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Assume you have 30 electrical devices in operation. Assume the cost of your house is $1mil. Then avoiding that fire should be worth ~$13 per device. However, th

Assume you have 30 electrical devices in operation. Assume the cost of your house is $1mil. Then avoiding that fire should be worth ~$13 per device. However, the device manufacturer would not need to bear that cost, meaning it goes unpaid.

marcinzm 4y ago
You'd be correct if every house fire totaled the property and the average house price was a million. It seems house fires cause $1.5billion in property damage per year in the US and there are 360k of them. Assuming electrical fires are twice as damaging as the average fire we end up with a cost of $10k per fire. That works out to around 15 cents per electronic device in your example. Even that is a high estimate since I believe only a minority of electrical fires are due to consumer electronics (versus things like faulty or old wiring).
- jonhohle 4y ago
  Narrator : A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? 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. Woman on Plane : Are there a lot of these kinds of accidents? Narrator : You wouldn't believe. Woman on Plane : Which car company do you work for? Narrator : A major one.
  - com2kid 4y ago
    Meanwhile in reality, cars undergo multiple recalls every year to fix a myriad of issues. Reputational damage is so high from consumer deaths now days, the balance sheet comes out in favor of fixing issues.
    - toast0 4y ago
      Cost of settlements went way up too.
    - jack_pp 4y ago
      replace cars with drugs and it's the same old story
  - MonkeyClub 4y ago
    The first rule of recalls is we don’t talk about recalls.
  - therealjumbo 4y ago
    Do you have inside knowledge of how the recalls are done? It's a lot more complicated than that: https://www.newyorker.com/magazine/2015/05/04/the-engineers-lament https://www.newyorker.com/magazine/2015/05/04/the-engineers-... Even to the point where an actual horrific accident doesn't necessarily mean that vehicle is any more dangerous than other vehicles on the road, they just don't have that exact failure mode but do kill people nonetheless. And no amount of money is going to buy perfect safety either. As always, engineering is all about tradeoffs, no way around it. Car companies have dropped the ball on safety in several cases, but just because somebody died, doesn't mean they did.
  - nfriedly 4y ago
    (For folks who didn't catch the reference, this quote is from the movie Fight Club - https://www.youtube.com/watch?v=IA2EBWFCULg https://www.youtube.com/watch?v=IA2EBWFCULg )
    - hedora 4y ago
      And that scene is almost certainly referring to Ralph Nader’s best-selling book, Unsafe at any Speed: https://en.m.wikipedia.org/wiki/Unsafe_at_Any_Speed https://en.m.wikipedia.org/wiki/Unsafe_at_Any_Speed

marcinzm 4y ago

You'd be correct if every house fire totaled the property and the average house price was a million. It seems house fires cause $1.5billion in property damage per year in the US and there are 360k of them. Assuming electrical fires are twice as damaging as the average fire we end up with a cost of $10k per fire. That works out to around 15 cents per electronic device in your example. Even that is a high estimate since I believe only a minority of electrical fires are due to consumer electronics (versus things like faulty or old wiring).

jonhohle 4y ago
Narrator : A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? 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. Woman on Plane : Are there a lot of these kinds of accidents? Narrator : You wouldn't believe. Woman on Plane : Which car company do you work for? Narrator : A major one.
- com2kid 4y ago
  Meanwhile in reality, cars undergo multiple recalls every year to fix a myriad of issues. Reputational damage is so high from consumer deaths now days, the balance sheet comes out in favor of fixing issues.
  - toast0 4y ago
    Cost of settlements went way up too.
  - jack_pp 4y ago
    replace cars with drugs and it's the same old story
- MonkeyClub 4y ago
  The first rule of recalls is we don’t talk about recalls.
- therealjumbo 4y ago
  Do you have inside knowledge of how the recalls are done? It's a lot more complicated than that: https://www.newyorker.com/magazine/2015/05/04/the-engineers-lament https://www.newyorker.com/magazine/2015/05/04/the-engineers-... Even to the point where an actual horrific accident doesn't necessarily mean that vehicle is any more dangerous than other vehicles on the road, they just don't have that exact failure mode but do kill people nonetheless. And no amount of money is going to buy perfect safety either. As always, engineering is all about tradeoffs, no way around it. Car companies have dropped the ball on safety in several cases, but just because somebody died, doesn't mean they did.
- nfriedly 4y ago
  (For folks who didn't catch the reference, this quote is from the movie Fight Club - https://www.youtube.com/watch?v=IA2EBWFCULg https://www.youtube.com/watch?v=IA2EBWFCULg )
  - hedora 4y ago
    And that scene is almost certainly referring to Ralph Nader’s best-selling book, Unsafe at any Speed: https://en.m.wikipedia.org/wiki/Unsafe_at_Any_Speed https://en.m.wikipedia.org/wiki/Unsafe_at_Any_Speed