No Country for Old Probability Theorists

25 March 2008 at 12:04 pm 10 comments

| 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?

Entry filed under: - Klein -, Entrepreneurship, Management Theory, Methods/Methodology/Theory of Science.

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10 Comments Add your own

  • 1. brayden  |  25 March 2008 at 2:21 pm

    I thought the movie and the book on which it was based deal well with the issues of agency, risk, and determinism. The coin flip scene, in particular, grapples with this idea that our consequences suffer from a strange combination of historical determinism (i.e., Carla Jean had very little to say about what happened to her life when her husband chose to take the drug money) and chance (i.e., Chigurh was willing to concede her fate to a coin flip). Seems to represent well the problems/opportunities that most of us face, including entrepreneurs.

    It’s pretty obvious that Cormac McCarthy (the novelist who wrote the book on which the script was based) has been hanging around with scientists. He’s had an office in the Santa Fe Institute for several years, and regularly reads the papers that come out of the institute.

  • 2. Ali Shams  |  26 March 2008 at 4:04 am

    You’re post is great, but it reminds me of a quote by sir Ken Robinson who said:

    “If you ever go to the ball room of a hotel where there’s been an academic conference you see men and women who roll uncontrollably to the music… off the beat…. waiting for the end so they can go home and write a paper about it.”

    Seriously, the post was good.

  • 3. Peter Klein  |  26 March 2008 at 9:11 am

    Ali, that’s a great quote, thanks. My dad was a history professor and I remember that long after he retired, he couldn’t read a book, even for pleasure, without a pencil in hand, ready to underline and take notes in the margin.

  • 4. aje  |  26 March 2008 at 9:38 am

    Here’s my take on ‘There will be blood’:

  • 5. Peter Klein  |  26 March 2008 at 10:45 am

    See also Stephen Carson’s commentary on films relevant to Austrian economics and libertarian political theory:

  • 6. spostrel  |  26 March 2008 at 8:39 pm

    I have just reread the best short story I’ve ever found about entrepreneurship–Max Apple’s “Peace,” collected in a newly issued volume of his stories called The Jew of Home Depot. “Peace” is a clever, funny tale about what we would call Kirznerian alertness, Knightian judgment, market ethics, and so on, but normal people would call character development and plot. Some of the other stories in the collection have business themes as well, and many of Apple’s characters are small businessmen of one sort or another.

  • 7. Peter Klein  |  27 March 2008 at 9:53 am

    Thanks Steve, I didn’t know that one. Kirzner often illustrates his theory using Maugham’s short story “The Verger,” which you can read online.

  • 8. Dmitry Chernikov  |  1 April 2008 at 12:31 am

    If the chance of calling it wrong and getting killed were 1 in a million, would it be reasonable for Carla to refuse to call? And if not, then doesn’t the (1 million-sided) coin partly determine the decision? Hence it’s not true that “The coin don’t have no say,” because the killer respects its decision. Instead of thinking of him as a villain who adds insult to injury by trusting his demonic providence, we can think of him as a malfunctioning robot whose behavior obeys a random number generator.

    Oh, and this theme is also well-presented in Conan Doyle’s A Study in Scarlet, though there the protagonist is executing vengeance; he is not a psychopath.

  • 9. Rob Bensinger  |  2 April 2008 at 9:31 am

    But to see Chigurh as a robot is to exonerate him of all moral responsibility: Carla chose not to play Chigurh’s game, not to accept the terms of his gamble, on the grounds that Chigurh _is_ a human being. Chigurh is not a robot, and is fully capable of simply opting not to kill a person, even if he happens to be unwilling to do so.

    If one accepts the terms of Chigurh’s game as being necessary ones, and if one’s primary goal is immediate survival (ignoring factors like the best long-term societal results), then of course one should pick “heads” or “tails.” But Carla knew that Chigurh could compromise his “principles” if he really wanted to, and either believed that he would do so, or felt it important enough to demonstrate this fact that she was willing to forfeit her 50% chance of survival to shake Chigurh up.

    Although she obviously may have had irrational motivators for doing this (e.g., not caring whether she lived or died because she was in mourning, or wanting to have a personal impact on Chigurh more than wanting to maximize survival chances, or wanting to “die with dignity” if at all and not compromise her own principles), her decision wasn’t necessarily an irrational one if she simply had a different primary goal than maximizing her immediate survival chances. If her main goal was to dismantle Chigurh’s pretense of not being responsible for his killings, she did exactly the right thing.

    The coin does “have a say” in the sense that it’s a factor, but as the original post pointed out, it’s not a _necessary_ factor. Chigurh is not a robot, and is not forced to accept the coin’s verdict; to view him as one is to miss the more important, broader message about human nature.

  • 10. frki  |  30 November 2008 at 6:09 am

    I came to this post because i was to amazed by the same quotation ” The coin don’t have no say.It’s just you.”.
    One thing is the he is passing responsibility to someone else,and second that he is living life by the fate,fate of coin probability. It’s like the bread with peanut butter if dropped always falls on the peanut butter side,because we expected it to,and probability is the same 50%, but we are the one who chose on which part of bread we will put peanut butter. We can live life with 50 % or CHOOSE and live out life with 100%,all we have to have is the courage of acceptance

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