This sandbox is part of the TRS thread, and is based on the crowner decision (which was unanimous 21 to null).
When Work X references Work Y, and Actor X was in both.
When two separate works exist and an actor is in both of them and one of those works makes a Shout-Out to the other, that is a Celebrity Paradox. This paradox relies on having a Real Life perspective. That is, the actor as an actor exists separately from that same actor as different characters they have played. So, if a Celebrity Paradox is in play, the actor-as-character-X exists in Work X, and actor-as-character-Y exists in Work Y, but the actor-as-actor does not exist in either, barring As Himself performances.
Because this is a form of Shout-Out, the actor does not need to be the one to make the reference. The work itself could also. For example, this trope can be in play if there's a poster or In-Universe ad playing in the background while the actor is in the scene. So long as the alleged example isn't disqualified for other reasons, that's a Celebrity Paradox.
As one might imagine, this paradox describes the complications that arise from creating a fictional universe in which that fictional universe does not exist, and the actors playing roles within it do not exist either.
This brings various questions to the forefront that most people don't think of while they still have a Willing Suspension of Disbelief. For example, fans may start questioning the actor's existence in either work and who played what role in the fictionalized version of the referenced work. They may also start asking if other actors from that work are going to show up.
It's important to note that, if actor-as-character-X exists in both Work X and Work Y, then it is not an example of this trope. Another way to put this is that "actor X appears in both" is insufficient; the actor needs to be in a different character role. This disqualifies Sequels and the like even if they reference each other. It also disqualifies works set in the same universe where one actor plays the same role. There's nothing strange about such an example anyway; it's a sequel so it makes sense for the actor to reprise the role.
Something else that disqualifies an alleged example is if an actor plays different roles in the same work. One way to put this is that "actor-as-character-X and actor-as-character-Y exist" is insufficient; the characters need to be in different works. There's nothing to Shout-Out to in such a case.
In modern updates of a work, the original may be unheard of. Writers get a li'l kick out of toying around with the concept, such as having the character meet the actor/actress playing them or giving a Shout-Out to the original source. Cameos of famous actors or artists may either be in the form of Recursive Canon or Richard Nixon the Used Car Salesman.
This avoids such awkward issues as why the plucky hero isn't constantly asked for autographs. It can become extremely awkward when the show is set amongst the showbiz industry, and the stars and writers become famous enough to be on the scene where the show finds itself. Also, if a larger-than-life celebrity were chosen to play a nerd, a geek, or a loser (for example, Hilary Duff in A Cinderella Story), that would also be extremely awkward.
Many a show or movie trying to be hyper-realistic does its best to distill this concept to an extent by refusing to cast a Celebrity Star because he or she is not obscure enough and would be too recognizable, as it strains Willing Suspension of Disbelief. Of course, if the star becomes famous because of said work, the same issues could still pop up.
Note that, in Animated Series and Anime, the Celebrity Paradox wouldn't be as big of an issue. After all, in this type of medium, the characters wouldn't necessarily resemble the actors who do the voices of them. Additionally, the paradox may be avoided if the work is a Period Piece set before the actors were famous. So, for example, no one in Raiders of the Lost Ark can wonder why Indy looks exactly like Harrison Ford because the film is set before Harrison Ford was even born. Perhaps, the paradox may also be avoided in works that take place in the far future — when the actors are likely to be forgotten. And it's avoided completely in Constructed World fiction, of course.Some animations actually even conciously play with this trope with Talking to Himself by having the actor voice themselves...and someone else (for total Refuge in Audacity, they even point the celebrity out themselves).
Certain Setting Updates can face a similar problem: they have to be set in a world where no one will recognize the name of Sherlock Holmes, Superman, or Macbeth, or the tropes that they've since made popular, but are otherwise culturally identical to the real world. Again, it's best to just not think about it.
The answer usually gone with is the simplest one — things went the same way, but in place of the actor or show that could not exist, it was a very similar actor or show. This actually appears in Last Action Hero, as the image above shows. Jeri Ryan probably moved to Hollywood because she got cast in Battlestar Pegasus: The Geminon Years. Nobody in Fringe notices that William Bell looks just like Mr. Spock because, in their universe(s), Spock was played by Christopher Lee. And so on.
Playing with this is a form of Postmodernism. Actor Allusion can be a form of playing with this. Contrast Your Costume Needs Work and compare Recursive Canon, see also Different World, Different Movies.
Of course, in real life, there are plenty of people who closely resemble celebrities and go about their business without being mistaken for them. Maybe we're all in a movie!
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