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Tragedy of the Blood Commons

(cross-posted at the Volokh Conspiracy)

Undead film and fiction are burgeoning with economic questions.  But the most glaring of these questions relate to the economics of food.  Vampires and zombies are both known for their peculiar and often voracious eating habits.  It’s natural to wonder whether there’s enough food to feed all those hungry mouths.

The movie Daybreakers explicitly addresses the question of how the undead can manage (or mismanage) the food supply, depicting a world in which vampires have hunted humans to the point of extinction — and consequently face starvation themselves.  When I first heard about the movie’s premise, I immediately thought, “Tragedy of the commons!”  Eventually, my reaction expanded into Chapter 15 of Economics of the Undead.  Here’s an excerpt:

To understand the perverse incentives that accompany open-access resources (also known as common-pool resources or “commons” for short), it’s useful to consider a short parable.

The vampire Reynaldo has trapped a young human woman in a dark alleyway. Just as Reynaldo is preparing to sink his fangs into her flesh and suck her dry, his keen hearing picks up something unusual… a second heartbeat. The woman is pregnant!

Reynaldo pauses for a moment, deciding what to do. Maybe he should let her go. If he does, then the woman will eventually give birth. At some later date, Reynaldo thinks to himself, he can trap her again, drain her, and still have her offspring left for dessert. And being immortal, Reynaldo isn’t so impatient that he couldn’t wait a while longer. Resisting his bloodlust for now seems like the rational thing to do.

And yet . . . if Reynaldo lets this woman escape, who’s to say it will be Reynaldo who gets to drink her later? There are plenty of other vampires out there, all of whom would happily take this woman’s lifeblood, and her child’s, too. If there are just nine other vampires out there, Reynaldo thinks to himself, then he has only a one in ten chance of being the lucky one. So it’s one meal for sure now, versus a 10 percent chance of two meals later. Reynaldo frowns as he does the math. . . .

And plunges his teeth deep into the young woman’s neck.

Repeat that same decision-making calculus for all the other vampires, and you have a recipe for overhunting of the human population — to the detriment of all vampires.  The basic problem is that the individual vampire reaps the whole benefit of feeding now, while the cost of that feeding (fewer humans left behind to breed) is shared among all the other vampires who prey on the same human population.

As the remainder of the chapter makes clear, humans have faced similar difficulties with managing common-pool resources.  The best-known modern example is the overfishing of the international oceans, which by one estimate has reduced the stock of large ocean fish to ten percent of its pre-industrial level.

To the uninitiated, overfishing might seems like a problem of excessive demand.  When people want a lot of something, they overuse it, right?  But that explanation is belied by the existence of other species, like chickens and cows, that are in no danger of extinction despite high demand.  As I put it in the chapter, “The key question is how vampires can make humans less like fish, and more like chickens and cows.”  And the answer lies in the institutions that govern economic life — in this case, whether renewable resources are treated as communal or private property.  Communal ownership tends to result in the overuse and destruction of resources, while private ownership encourages conservation.  The chapter, written from the perspective of a vampire economist, therefore makes the tongue-in-cheek proposal that vampires ought to privatize the humans in order to prevent a Daybreakers-like disaster.

Given the centrality of eating-and-drinking in undead lore, it shouldn’t be surprising to find the tragedy of the commons manifesting in other ways.  In Economics of the Undead, it comes up in at least two other chapters.

First, it arises in Tufte, Tufte, & Bishop’s chapter, “What Happens Next? Endgames of the Zombie Apocalypse.”  If the zombie horde eventually converted all the humans into zombies, the zombies would find themselves without neither food nor future hosts.  It is therefore in the zombies’ interest to restrict their consumption so as to foster a stable (or even growing) human population.  Like vampires, however, the zombies’ individual incentives may deviate from the optimal behavior for the group.  Unlike vampires, zombies lack the rational capacity to consider alternative institutional arrangements.  But as Tufte, Tufte, & Bishop argue, the virus that inhabits all zombies might evolve to solve the problem.  After all, a virus that leads to the extinction of its host species is not a well-adapted virus.  A superior zombie virus would moderate its hosts’ eating patterns.  This could be regarded as a quasi-centralized alternative to private property as a solution to the tragedy of the commons.  (Saturday Morning Breakfast Cereal offers an awesome comic version of this scenario.)

Second, the tragedy of the commons also comes up in Michael O’Hara’s chapter on “Zombies as an Invasive Species.”  O’Hara suggests that recreational zombie-hunting might provide a means of controlling the zombie population, much as recreational hog-hunting has helped to curb the feral hog population in some states.  But if zombies became an economically valuable species in this way, it’s possible that humans might overhunt the zombies, leaving too few zombies for future hunters.  As a solution, O’Hara says, we might see the emergence of private zombie-hunting preserves.

Returning to my own chapter, you might think that I’ve chosen an odd way to champion the concept of private property, given that most human readers would not fancy becoming part of some vampire’s herd — even if the herd were “free-range” and its members unaware of their owned status, as suggested in the essay.  Although I don’t address this concern in the chapter, I’ll address it here.

From a philosophical perspective, humans are unlike cows and chickens because they are intelligent and self-aware.  This distinction seems relevant to omnivores, less so to vegetarians and vegans.  But let’s set aside the philosophy for a moment.  Obviously, the best scenario for humans would be for vampires not to exist at all.  Next best would be “vegetarian” vamps who voluntarily refrain from eating humans (like Louis in the Vampire Chronicles, Angel on Buffy, and the Cullens in Twilight).  But if vampires really existed in large enough numbers to threaten the human population, if they resisted our best attempts to destroy them, and if they couldn’t be persuaded to go veggie, then wouldn’t we want vampires to at least find a way to conserve us?  Our survival as a species would depend on it.  Both humans and vampires would gain from the privatization.  Being oblivious, free-range humans might not be so bad.  Who knows?  Maybe we already are.

An Apologia for Undead Studies

(cross-posted at the Volokh Conspiracy)

(coauthored with James Dow)

Economics of the Undead: Zombies, Vampires, and the Dismal Science is a collection of 23 essays, written by ourselves and many others, that apply economic reasoning to understand zombies, vampires, and the humans who share their world.  And no, we don’t just mean metaphorical zombies and vampires — we mean the real thing.  The book includes chapters on the investing secrets of wealthy vampires, preparation for economic recovery after the zombie apocalypse, optimal taxation of zombie labor, and the political economy of responding to undead threats (by the Volokh Conspiracy’s very own Ilya Somin).

Why should we waste time studying the undead, especially when there are so many serious topics to consider?  Although the appearance of academic articles, books, and even courses on the undead has mostly drawn favorable press, some critics argue that the opportunity cost is too high.  The leading critic seems to be Michael Poliakoff, policy director for the American Council of Trustees and Alumni, who is cited in two recent articles on the subject.

Michael Poliakoff … says the proliferation of undergraduate courses in topics like zombies and vampires is helping ruin American students’ brains. Citing various studies, Mr. Poliakoff says many U.S. college graduates still lack proficiency in basic verbal literacy.

“What have we given up in order to dabble in the undead?” he says. “We’ve given up survival skills.”

How do we respond to these charges?  Our defense is two-fold.

First, lighten up!  Not everything in life is about eating your vegetables.  Zombies and vampires are fun, and there’s nothing wrong with that.  And for a certain type of geeky personality (that’s us), part of enjoying any product of pop culture is getting hyperanalytical about it.  Sometimes we academics like to apply our training in less-than-serious ways. Rather than perceive undead studies as a bad investment, we regard it as good consumption.

Second, and more seriously, we contend that — at least in economics — academics and the undead are complements, not substitutes.  As instructors, we are constantly looking for ways to keep our students awake and engaged in the material, and often that means using humorous and provocative examples to demonstrate economic principles.  Importantly, those principles remain unchanged.  The supply-and-demand model is essentially the same whether applied to widgets (booooring), illicit drugs, or units of blood.  Comparative advantage is the same whether applied to trade between the U.S. and China or between the living and the dead.  In editing Economics of the Undead, we were scrupulous about making sure the economic concepts and reasoning were sound, despite the fictional subject matter.

(An aside:  One of our colleagues said to Glen, “Back in the day when I learned economics, it was about widgets, not zombies!”  To which he replied, “To be sure, the zombies will be working in widget factories.”)

This defense might not work as well in other disciplines.  If English departments have completely abandoned Shakespeare and Jane Austen in favor of the latest schlocky zombie novels, we concede that might be a problem.  (Then again, maybe they’re assigning Pride and Prejudice and Zombies and getting the best of both worlds.)  However, if the goal is to impart basic writing skills (Poliakoff’s concern), those skills can be learned by writing about pretty much anything.  Why must English composition always be paired with (classic) English literature?  If writing about vampires is what motivates students to write at all, we say more power to the vampires.

As in all things, moderation matters.  If zombie studies courses really are pushing out, rather than complementing, courses that teach important skills, then Poliakoff’s concerns may be warranted.  But we are skeptical.  We suspect the real opportunity cost of zombie studies courses is not basic required courses, but elective courses on topics that are equally pointless in terms of students’ long-term life prospects.  How much good did that whole semester on Faulkner do you, anyway?  (We sure hope you didn’t get your writing composition skills from The Sound and the Fury.)  Moreover, devoting an entire course to the undead isn’t the only way to go; we haven’t yet pitched an Econ Undead course to our university.  We think the best way to make use of the undead in the classroom is to integrate them into existing courses alongside other (more serious) examples, sucking students into the discipline by showing them the breadth of its possible applications.

And did we mention that zombies and vampires are fun?

Are Zombies Labor or Capital?

Although the possibility of zombie labor comes up more than once in Economics of the Undead (particularly Chapters 11 and 14), apparently none of the authors knew about “The Dead,” a little gem of a zombie story by Michael Swanwick, which I read for the first time today. The story suggests several more answers to the question of what jobs zombies might perform in the new undead economy:

“There’s no money in it.” I waved a hand toward our attentive [zombie] waitstaff. “These guys must be — what? — maybe two percent of the annual turnover? Zombies are luxury goods: servants, reactor cleanups, Hollywood stunt deaths, exotic services” — we both knew what I meant — “a few hundred a year, maybe, tops. There’s not the demand. The revulsion factor is too great.”

As the rest of the story suggests, the narrator’s pessimism about the demand for zombies might be unjustified. “The Dead” raises a number of economic questions, including whether zombies could drive the human working class into permanent unemployment. I hope to address that issue in a future blog post, but for now I want to highlight a narrower question: Should zombies be regarded as labor or capital?

Joseph Mandarino, in his chapter on “Taxation of the Undead,” essentially claims the latter when he says that non-sentient undead (zombies) should be taxed as property, whereas sentient undead (vampires) should be taxed as persons. If zombies are genuinely mindless, then they’re akin to work animals. Work animals are classified (I believe) as capital equipment in the national income accounts, and the income they generate is a return to capital. But in some depictions, zombies aren’t totally mindless. Some are capable of engaging in a certain amount of thought, even strategic planning — as in Return of the Living Dead, where a zombie moans, “Send… more… paramedics” into an ambulance’s radio, thereby summoning fresh brains to the scene. (I took this example from my coeditor Jim Dow’s chapter on “Packing for Zombie Apocalypse.”) In some depictions, zombies even form societies under the leadership of smarter and more foresighted zombies (as Jean-Baptiste Fleury and Alain Marciano discuss in their chapter, “Order, Coordination, and Collective Action among the Undead”). Zombies like these are much closer to humans than equipment.

Thus, it appears that sentience is not an all-or-nothing proposition. Zombies exist on a spectrum from fully mindless drones to rational beings. If so, then economists’ sharp distinction between capital and labor (or “K and L” in deeper econ jargon) may be unjustified. Even if we chose an arbitrary dividing line on the K-L spectrum, we could always imagine a zombie that sits right on that fence, wreaking havoc on our presumptively clear-cut distinctions.

For what it’s worth, economists’ mathematical tools are fully up to the challenge of treating K-L as a spectrum rather than a sharp dichotomy. But I remember working with models like that in grad school, and trust me on this: it’s enough to make your brain hurt.

Zombie Hunting for Fun and Profit

In Chapter 16 of Economics of the Undead, “Zombies as an Invasive Species,” Michael O’Hara suggests that recreational zombie hunting could help to keep the zombie population under control. As evidence, he points to the popularity of video games like Left 4 Dead and Resident Evil. And that popularity shows no signs of abating. Over the last couple of weeks, I’ve become aware of no fewer than seven recent or forthcoming zombie-related video games: Zombie Village (cartoonish zombie hunting), Zombie Puzzle Panic (Candy Crush with zombies), Coffin Dodgers (car racing with zombies), Escape Dead Island (mystery on a zombie-infested island), Deadskins (zombie Indians, the most politically incorrect of the bunch), Undead vs. Plants (zombie vegetation? I don’t know), and Zombie Driver (car chase-and-rescue with zombies).

But could it be that real zombie-hunting and virtual zombie-hunting are economic substitutes? If so, then the presence of these video games could actually reduce the efficacy of recreational zombie hunting as a means of keeping the zombie population in check. Is there any evidence that people would prefer the real thing?

Actually, yes. A spate of recent news stories document the rise of zombie gun ranges. Tired of firing their weapons at the same old boring targets, gun enthusiasts now imagine they are blowing away hordes of the undead. In a related development, paint-ballers and laser-tag enthusiasts have also adopted the walking dead as favored targets. Point being, people are no longer content to hunt zombies from the comfort of their couches — they want the experience to be as real as possible. I’m guessing at least some of these folks will jump at the chance to take on the genuine article.

Zombies in the Real Estate Market?

Fun with headlines: A Connecticut newspaper reports, “Zombie puts house on market in Woodbury.Walking Dead fans will be surprised to learn that the walkers are now allowed to buy and sell real estate in the Governor’s zombie-free safe haven. I don’t know if this is bad news because it means the zombies have infiltrated the town, or good news because apparently they’re already vacating.

(Turns out the seller is actually musician Rob Zombie, and the Woodbury in question is Woodbury, Connecticut.)

Econ vs. Psych in Undead Narratives

Which discipline better explains the appeal of vampire stories — psychology or economics? Two recent articles present differing perspectives. On the psychology side, we have Kaylynne Spauls at Liberty Voice offering a variety of reasons that vampires touch the deepest of the human (and especially female) psyche:

Yes women love bad boy characters. It is maternal instinct to nurture and help someone grow. Feeling needed is an important aspect of the fantasy, and one that audiences outside the genre seem particularly annoyed by…

Women also have an instinct to breast feed. It is an extremely intimate action and creates a bond between mother and child. A potential mate that needs to feed, and is particularly inclined towards a specific woman’s blood, gives the impression that she could nourish and sustain them better than anyone else. …

According to myth, vampires are extremely protective. Though we live in a society that frowns upon the damsel in distress, it is still basic human instinct to search out a mate that can better protect a family.

I only report these psychological claims, without endorsing them — though I will say that if a male writer had made such generalizations about women, he would be inviting a storm of criticism.

On the economics side, we have Joy, an intern at Beaufort Books, arguing that the appeal of vampire stories relates to the difficult choices vampires are forced by their nature to make. She doesn’t use the word “economics,” but as an economist, it’s hard not to notice the leading role of trade-offs in Joy’s argument:

The central dogma of the vampire myth is that they drink blood. Further, by far the most popular thing in current cultural recreations of vampires is, you know, that one broody dude vampire who is so tortured and doesn’t want to drink human blood because “it’s wrong” and he’s so conflicted and his nature so disgusts him, god, isn’t he tortured.

That guy is what, potentially, makes vampires interesting.

Because you’ve got this undeniable desire for something (in this case, blood). No one can deny that you’ve got that desire when you’re a vampire. That’s your food. It’s what you survive on. … With vampires, this thing they live on, the thing they crave, comes with this stipulation that, probably, you’re going to have to kill someone. …

Further, vampires skip over these laborious discussions of, “Well, why do you want that thing?” and creaters [sic] can go straight into what effect this want has on their individual. …

So many characters that are vampires go through this struggle with their own nature, and it’s handled by different artists in a variety of ways. But one thing you always return to is this moral struggle: I want this thing, but I shouldn’t be able to have it. That’s the central plot of every vampire-based piece of media I can think of at the moment. That’s the drama.

Of course, the choice between psychology and economics is a false dilemma; both might have something to do with the popularity of vampires. If Spauls is right, then psychological factors may play an especially large role for the female audience that seems to be driving the current vampire craze. But speaking as both an economist and a screenwriter, I find Joy’s emphasis on trade-offs — particularly moral trade-offs — compelling. Sharp trade-offs create sharp conflicts, a necessary component of all good storytelling, vampire or otherwise.

I could leave it at that, but… I also want to mention Ian Chadd’s Chapter 21, “The Economics of Bloodlust,” in which he applies Becker & Murphy’s model of rational addiction to vampire hunger. As Chadd emphasizes in that chapter, moral trade-offs do indeed fall within the explanatory realm of economics — which means your brooding “vegetarian” vampires like Louis, Angel, Stefan Salvatore, and the Cullen clan can be understood as rational actors optimizing in the face in unusual circumstances.

The Humans Fight Back

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.

Corporate Corpses

Christine Dougherty’s book Zombie, Inc. tells the story of a private security corporation that (as told by one Amazon reviewer) “hunts down zombies, provides security against zombies, conducts research on zombies, as well as providing hundreds of jobs for the people who live in the city. On the theory of safety in numbers, the survivors long ago took over the abandoned high-rise apartments surrounding the company headquarters. Everyone sought jobs at Zombie, Inc., a nice take on the old company-store that kept workers poor in the early 1900s.”

I haven’t read the book (I only became aware of it last week), but I can’t resist sharing some premature thoughts on the plausibility of the premise. I admit I was skeptical at first. There’s no particular reason to think that zombie wrangling would be a monopoly, or even an oligopoly. The most important raw material — zombies — would be readily available, maybe too available, making it difficult for just one company to corner the zombie market. I also don’t see great economies of scale in zombie capture and zombie confinement. It’s possible that a single company might have proprietary technology or a government-granted monopoly, but absent those things, I suspect zombie wrangling would be a relatively competitive market.

However, the above analysis is premised on a particular vision of the zombie invasion — one in which, after the initial panic, zombies remain an ever-present threat (much like cancer and car accidents) but otherwise society returns to something like the status quo ante. But as described in the review, Dougherty’s book seems to imagine a full-scale zombie apocalypse having occurred in which huge numbers of people have died and most social institutions have collapsed. (Again, this is only my inference.) In that situation, we should expect to see groups of survivors banding together in relatively closed communities in the aftermath, such as the town of Woodbury in The Walking Dead. Zombie, Inc. plausibly suggests that a private security corporation might form the nucleus for such a community — and as such, it might operate as a de facto government as well as a profit-making enterprise. Given a much-reduced population and the danger of traveling long distances, it could be very difficult for people to leave one community for another, especially if communities are wary of new arrivals. For that reason, the corporation/government would face little competition, making the “company town” analogy apt.

But I’ll need to read the book before I can say whether the story actually makes sense in these terms. In any case, it seems to be one of the few novels that explicitly deals with the economics of the undead, so I feel I should give it a premature endorsement for that reason alone.

Zombie Recession Stories

When I saw the op-ed headline “Kill these zombie recession stories,” I assumed it would be about recessions that seemingly come back from the dead after the recovery has begun — what economists often refer to as a “double-dip” recession. But no! It’s really about recession-related news stories that keep coming back every time there’s a recession.

And then I realized… it’s what my linguist brother Neal would call a bracketing ambiguity! You see, I read it as {{zombie recession} stories}, whereas the author meant {zombie {recession stories}}.

On this site, you don’t just get undead economics, you get undead linguistics, too. And add “zombie [ ] stories” to the list of undead metaphors.

Optimal Control of the Humans

Of course, we were not the first to look at the connections between economics and the undead. Here’s a paper from 1982 that examines the optimal management of humans from the vampires’ point of view. Warning – the paper is very mathematical (much more than we are, but this is what happens when people who like math get bored).

Leaving the math aside, the basic idea is that vampires value humans for their blood, but taking blood turns the humans into vampires which both increases the number of predators and reduces the number of prey. The paper develops an approach for determining the optimal number of humans relative to vampires – a “steady state”. It then raises an interesting question. Say that there are currently 7 billion humans but the goal is 15 billion humans. What is the best way to get there? Do you temporary stop killing humans completely to grow the population as fast as possible? Or do you keep killing a few humans now to enjoy the blood even though it will take longer to get to the desired stock?

The answer turns out to depend on marginal utility, that is, the amount of enjoyment you get from each additional pint of blood. If the 10th pint of blood is just as good as the first, then you’ll want to get to the steady state as fast as possible (the “bang-bang” solution). On the other hand, if a pint is worth much more when you haven’t had much to drink, a more gradual path to the steady state is better.

It’s never this simple, of course. As Glen explains in Chapter 15, vampires have an incentive to behave individually in a way that undermines the optimal solution for the group.

Also, if you haven’t had enough of dynamic systems — and who has? — Bishop, Tufte and Tufte take a non-mathematical look at the how the population of zombies might rise or fall over time in Chapter 6.