That statement sounds underdetermined. I would support it if it were modified to this:
Halting drilling pending further research would only seem to make sense if the expectation of loss from another disaster exceeded the profits accruing from further drilling without extra research, which seems unlikely.
Of course, that’s from the company’s view. To ask whether the government should ban drilling, pending further research, we have a stronger standard to meet: Does the expectation of externalized costs from another disaster exceed the benefits to society of continuing drilling without further research?
Also, oil companies may well not be interested in building new platforms better than the one that malfunctioned: Their expected loss is limited by their market capitalization; once they go into receivership the rest is externalized. So for extremely infrequent instances of loss much greater than the value of the company, the rational company will accept the risk.
There is weak evidence to support this: Hayworth was appointed CEO after a deadly refinery explosion; one would expect a chief executive brought onboard specifically to promote a new image of safety to take all cost-effective safety measures.
That statement sounds underdetermined. I would support it if it were modified to this:
Of course, that’s from the company’s view. To ask whether the government should ban drilling, pending further research, we have a stronger standard to meet: Does the expectation of externalized costs from another disaster exceed the benefits to society of continuing drilling without further research?
Also, oil companies may well not be interested in building new platforms better than the one that malfunctioned: Their expected loss is limited by their market capitalization; once they go into receivership the rest is externalized. So for extremely infrequent instances of loss much greater than the value of the company, the rational company will accept the risk.
There is weak evidence to support this: Hayworth was appointed CEO after a deadly refinery explosion; one would expect a chief executive brought onboard specifically to promote a new image of safety to take all cost-effective safety measures.