The Fatal Equilibrium was an assigned reading for my upcoming ECON 100 class. It’s set around the promotion of the young Harvard economics professor Dennis Gossen. Dr. Henry Spearman, a tenured professor at the university, is the main protagonist. When the Promotion and Tenure Committee rejects Gossen, he is found dead, allegedly by suicide. Two professors on the committee, Foster Barret and Morrison Bell, are also found murdered a day later. Dennis’ girlfriend, Melissa Shannon, is found guilty of the murders, but Henry Spearman remains uneasy. Through economic logic, Spearman comes to the realization that the dean of the university, Denton Clegg, is the true culprit. The book incorporated elementary economic concepts smoothly, usually through conversations between Spearman and his misinformed colleagues. The buildup of the plot was well executed as well, with an appropriate amount of exposition and tension building up to the tragedies. It was doing everything right, besides having extremely formal dialogue, until the very end, when I was left unsatisfied.
Henry Spearman reasoned Professor Denton Clegg to be the murderer based on illogical data in his book on the people of the Santa Cruz islands. Clegg wrote that a basket of yams costs 4 to 5 red feather belts a 25% difference, while a canoe varied between 780 to 1100 red feather belts, a 41% difference. Spearman’s conclusion was that the canoe, a much larger purchase, should vary in price less than a small purchase, such as the yams. According to the theory of utility maximization, a customer would spend less time searching for the cheapest yams compared to the cheapest canoe, because the time cost of searching for yams yields a much smaller return in savings. This means that canoe prices should be bunched together, or else the more expensive ones would never sell. Spearman took this as evidence that the data was falsified, and that Denton Clegg was a fraud. Dennis Gossen came to the same conclusion prior to his murder, which made targets of him and those he confided in. I agree with this concept, but given the context, why should it be surprising that canoes vary in price? Not every canoe craftsman is made equal. There’s bound to be more skilled craftsmen who make higher quality canoes. And his is an island secluded from society – they use feathers as currency, after all – so it’s not like they have factories that make every canoe the same! Logically, I would come up with a conclusion that lined up with Clegg’s falsified data. There is room for a way higher gap in quality between the worst and best canoe than between the worse and best baskets of yams, assuming baskets containing rotten yams aren’t considered. Spearman’s conclusion fits the narrative, but I disagree with him, and would have liked some further explanation against my case.
Here’s another reason I was unsatisfied. In chapter four, Oliver Wu was contemplating Dennis Gossen’s research on his way home. As a sociologist focused on criminology, Oliver Wu was weighing the costs and benefits of certain crimes in his head. When he came to the crime of murder, he suddenly had an epiphany: the fatal equilibrium. This happened on page 39 and was never revealed or mentioned for the rest of the book. I am forced to assume that Denton Clegg’s own costs and benefits to murdering Gossen and the two professors show this “fatal equilibrium.” However, I would have preferred if Oliver Wu’s views were expressed, as he isn’t an economist and could’ve offered something new and interesting.
The ending of any story is crucial. It’s one of the reasons everyone now hates the Game of Thrones show and why I will never waste hours upon hours watching it. The Fatal Equilibrium really captured my attention, but because the reasoning that solved the murder didn’t make sense, I can’t rate it highly at all.