In my last post, I talked about early economic work studying the undead, in particular, a paper that showed how vampires could optimally manage the human population. Not surprisingly, not everyone in the profession thought that developing these methods was a good idea. In a subsequent paper, an economist criticized the earlier work by saying:
“Clearly this approach is somewhat misguided. One wonders what conceivable interest the authors could have had in helping vampires solve their intertemporal consumption problem. The implicit assumption of the Invisible Hand (or Fang) -whereby vampires, in pursuing their own interests, pursue those of human beings as well – is of questionable validity.”
In his paper, this author constructed a simple model of an economy that produced only widgets and stakes and determined the optimal stake production strategy and how low the humans should drive the vampire population. It turns out that the optimal policy is not to drive the vampire population to zero. Perhaps surprising, but this result shows up in many models of undesirables. Even though we don’t like crime, it’s probably not optimal to spend the necessary resources to completely eliminate it; particularly in the vampire case where the costs are predominantly paid up front while the benefits come in the discounted future.
Unfortunately the paper is gated (so may not be available to those without academic access) but I wanted to mention it to assure readers that economists were hard at work on the undead problem.