Let's talk about the 'Concorde Fallacy'. (long thread)
The world's only supersonic passenger airplane (Mach 2.04) was co-developed by French & British aircraft manufacturers.
The world's only supersonic passenger airplane (Mach 2.04) was co-developed by French & British aircraft manufacturers.
The project was begun in 1954, estimated to cost £70M. Airlines around the world put in large non-binding orders for >100, 1963-1967.
The first test flight was 1969.
By this point it was over budget by £80M & had to be bailed out by French & British governments.
The first test flight was 1969.
By this point it was over budget by £80M & had to be bailed out by French & British governments.
Design flaws were discovered: metal at high speeds became soft, fuel failed to flow. Costs increased; French & British governments, invested in success, continue to bail out project. Development contract had large penalties for either government to pull out of ongoing support.
New design flaws: noise abatement during landing, tiltable "droop nose", disc brakes modified. Costs increase. Cancellation of orders begins.
Losses mount, positive revenue flow becomes unlikely.
Losses mount, positive revenue flow becomes unlikely.
Costs reach £1,300 million instead of planned £80M. 1st commercial flight is 1976.
Only 7 orders of planned 108 remain at this point, from British Airlines & Air France.
Trans-Atlantic flights on Concorde cost 30X non-supersonic equivalent ($13K round trip in 2019 dollars).
Only 7 orders of planned 108 remain at this point, from British Airlines & Air France.
Trans-Atlantic flights on Concorde cost 30X non-supersonic equivalent ($13K round trip in 2019 dollars).
A 2000 crash killing 113 + 9/11 impact on demand led to retirement in 2003, 27 years in service.
The "Concorde Fallacy" is another term for fallacy of sunken costs: we tend to throw good money at bad, like the British/French governments did.
The "Concorde Fallacy" is another term for fallacy of sunken costs: we tend to throw good money at bad, like the British/French governments did.
Human minds are bad at assessing alternative economic options. Economists refer to "bygones principle": letting go of any historical investments in an asset & focusing purely on current opportunity.
Sometimes the smart thing is to abandon a project because you avoid future losses. But sunken cost investments undermine our rationality with embarrassment, fear of what we will have lost.
So a £70M airplane project becomes a £1,300M.
So a £70M airplane project becomes a £1,300M.
Our false beliefs and denialism often begin as a simple mistake or misunderstanding. The more we cling to the mistake, the more invested we become in defending it.
Eventually it becomes too painful to admit the mistake: it's part of our identity now.
Eventually it becomes too painful to admit the mistake: it's part of our identity now.
As a solution: you have to give yourself permission to be wrong, you have to seek out that slight discomfort whenever you can, embrace it as a pathway to learning.
Once you're comfortable with being wrong, assess the evidence honestly and embrace truth.
It's the only way.
Once you're comfortable with being wrong, assess the evidence honestly and embrace truth.
It's the only way.
