The Bad Economist

SPOILERS: The Tenth and Eleventh Doctors’ Problem November 24, 2013

Major, major spoilers here. If you haven’t yet seen the Doctor Who 50th Anniversary Special, please avoid this post.

Really, seriously, please.

During the 50th Anniversary Special episode of Doctor Who, there was an interesting scene where a group of characters and their malevolent clones were negotiating a treaty that would determine, in part, whether the Zygons (an empire of malevolent aliens) would take over the Earth. This presents some quite interesting problems that were solved by some quite interesting guys – the Tenth and Eleventh incarnations of the Doctor.

Obviously each side had opposite incentives. The Zygons needed a planet to live on, and the human population did as well. Take for granted that the populations can’t coexist and you can see that this is what’s known in economics as a zero-sum game. Since they would not agree to share the planet, one side would have to come out the winner in the negotiations, with the other losing. Similarly, since each Zygon cloned a human negotiator, it inherited at least some of its human’s memories, meaning that we can assume symmetric information. In cases like this, it’s usually up to the agent with the higher valuation of the asset being negotiated to make some sort of concession to the agent with the lower valuation in exchange for agreeing to give up any claims – in other words, pay them to go away. In other cases, the agents will agree to let an arbitrator make the decision for them, under the assumption that the arbitrator won’t be clouded by personal decisions and will make the “best” choice, for some value of “best” to be determined.

The Doctors (played by David Tennant and Matt Smith) opted for an entirely different (and clever) solution, albeit one that wouldn’t work in the real world: they wiped the humans’ and Zygons’ memories so that each would forget which side they were on, allowing for efficient resolution of the problem. The theory, which is similar to Richard Rorty’s Veil of Ignorance, is that people who don’t know whether their side stands to benefit will reach an equitable solution, if not one that they might have argued for in the first place. As such, it’s an example of hidden information. The same thinking generates the idea in law and economics of efficient breach. This might result in the solution that’s efficient in the economic sense, but it probably won’t lead to anyone being the best off they could be.