Question
It is well known that children born of close relative marriages are very likely to have birth defects.
But all children in the Game of Thrones universe do not suffer any birth defects, given they are born from the King Slayer and his sister or they are born from Daemon and Rhaenyra.
Is there any rational explanation of this practice? Given Hemophilia as a well-known disease as a consequence of close relative marriage.
Answer
After comments
I think the question is based on a false premise, that there are 'no defects'.
'Insanity' is a 'defect'.
It is well-known to us today and we also know the reasons why.
Even if Game of Thrones wasn't set in a fictitious world, it has a technology level perhaps 500 to 1,000 years prior to the discovery of the gene. [They have no gunpowder, which puts it pre 13th century as a European equivalent.]
There is evidence they understand breeding and animal husbandry, if not the mechanisms behind it, and indeed some of the consequences. They are aware that hair colour is affected by that of the parents - Ned Stark's investigation into the Baratheon [Lannister] children's hair colour, for instance. They know the dragons are getting smaller over time, but it is not [as far as I can recall offhand] explained why.
There is also clear evidence, in character-revealed back story, as to the increasing insanity in the Targaryen dynasty as a result of their intermarriage, and again in that of the Baratheon/Lannister children.
There is a good précis of this on GoT Fandom.
Answered By - Tetsujin
