The Problem of Tesserae Inflation

Moneybox
A blog about business and economics.
March 8 2012 11:29 AM

The Problem of Tesserae Inflation

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I've finally started reading the celebrated Hunger Games trilogy, and naturally a Moneybox blogger's thoughts turn to the economic structure of Panem. There's no doubt plenty to say about this, but one initial observation is that the tesserae system seems like it should be prone to chronic inflation and instability. Without spoiling anything, the way the system works is that each year the tyrannical Capitol forces each of twelve Districts to send two children ("Tributes"), one male and one female, to participate in the annual Hunger Games. The Tributes are selected by lottery. But it's not a flat-odds lottery. In your first year of eligibility, your name is entered just one time. In your second year, it goes in twice. In your third year, thrice. And so forth. But in addition a poor child can enter his or her name an additional time in exchange for a tessera, "a very meager year's supply of grain and oil for one person." If you're very poor, you can take out a lot of tesserae. 

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A key property of this system that the series doesn't seem to explore is that the cost of the marginal tessera is an inverse function of the outstanding stock of tesserae. If there are 100 names in the bowl, then adding your name an additional time produces a substantial increase in your odds of being called.

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But if there are already 1,000 names in the bowl then the marginal increase in your odds of selection are much smaller.

Consequently, over time there ought to be massive tesserae inflation with the typical working-class child's name enrolled many many times and the provincial elite's children having only miniscule odds of being called. Now needless to say, given Panem's authoritarian structure, the political authorities could easily respond to this outcome by changing the rules. But given the rules as described, it's difficult to understand why the kind of widespread food shortages in District 12 described in the book should arise.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.