No Country for Old Probability Theorists
| Peter Klein |
I finally got around to seeing No Country for Old Men, which I enjoyed despite unrealistically high expectations (movies too suffer from the winner’s curse). Javier Bardem’s Anton Chigurh surely belongs with Darth Vader, Hannibal Lecter, Dr. Christian Szell, Nurse Ratched, and Max Cady on the list of all-time great movie villains. The movie is in one sense a meditation on the role of chance in human affairs, so naturally I started thinking about risk, uncertainty, choice, delegation, and other issues near and dear to our organizational hearts.
Chigurh, the cold-blooded killer, likes to flip a coin before deciding whether to kill someone, forcing the victim to call the toss. This reminded me that risk and Knightian uncertainty aren’t mutually exclusive determinants of economic outcomes. Entrepreneurs choose to invest in risky projects, but project selection itself reflects the bearing of Knightian uncertainty. Richard von Mises gives the example of champagne bottles that burst while in storage with predictable frequencies. The champagne producer can quantify the risks associated with bottling and storage. But the choice of producing one variety or another, hiring one type of laborer or another, and even being in the champagne business at all, involves another kind of uncertainty, one that cannot be described with mathematical precision. The decision to enter the champagne business involves Knightian uncertainty, but once that decision has been made, some of the variation in outcome can be characterized as probabilistic risk. Think of it in terms of mixed strategies; the specific move is random, but the decision to play a mixed strategy is not. Likewise, Chigurh can hardly claim that his victims’ deaths are random. A coin flip determines their fate, but he chooses to flip the coin — and that choice cannot be explained by a known probability distribution.
One of Chigurh’s victims recognizes the problem and refuses to play along. Chigurh acts as if he is delegating the murder decision to the coin. But, as we’ve discussed before, when principals delegate decision rights to agents they retain a kind of “ultimate” authority — namely the decision to delegate itself. Delegated rights to use and control assets owned by somebody else are conditional, or “derived” from the property rights of the owner. The asset owner giveth and the asset owner taketh away. The choice to let someone else make a decision is still a choice. Hence Carla Jean Moss, the protagonist’s wife, refuses to call the toss, reminding Chigurh that the responsibility is his:
Carla Jean Moss: You don’t have to do this.
Anton Chigurh: [smiles] People always say the same thing.
Carla Jean Moss: What do they say?
Anton Chigurh: They say, “You don’t have to do this.”
Carla Jean Moss: You don’t.
Anton Chigurh: Okay.
[Chigurh flips a coin and covers it with his hand]
Anton Chigurh: This is the best I can do. Call it.
Carla Jean Moss: I knowed you was crazy when I saw you sitting there. I knowed exactly what was in store for me.
Anton Chigurh: Call it.
Carla Jean Moss: No. I ain’t gonna call it.
Anton Chigurh: Call it.
Carla Jean Moss: The coin don’t have no say. It’s just you.
Any other thoughts on the film, or on “Organizations and Markets in Fiction” more generally?