The new HBO series Deadwood is the richest source of economics and management insights that the legacy media have ever produced. It also won two Emmys and has been renewed for a second season. No word when that will be or whether the first season will be out on DVD.
BTW: no intention to offend anyone ... the show repeatedly uses the words whores and pussy, so I will too where it follows the show.
Here's what I got out of the third episode, which originally aired last spring and in repeats this past summer.
Monopoly Becomes Duopoly
The episode opens with the conversion of a former hotel to a new saloon, The Bella Union. Swearengen is furious with the previous owner (who is leaving town) that he wasn't offered right of first refusal. The former owner remarks that "You would have had me killed first." He notes that he has taken precaution against Swearengen's "road agents".
Opportunity Cost of Lives
Doc Cochran recognizes that the deaths of the three highwayman reduce any danger to the Swedish orphan.
Brom Garrett deduces that Swearengen is behind the deal that left him with a worthless claim. He threatens to hire the Pinkerton's to go after him. The threat reduces the value of Garrett's life. His wife Alma urges him to flee. Swearengen urges Garrett to further examine his claim with Swearengen's henchman, Dority. Dority kills Garrett, but is secretly witnessed by the prospector Ellsworth. His life now loses value too.
Product Differentiation
Swearengen goes to visit Sy Tolliver, the owner of the Bella Union. He remarks that he opened in March of 1875, but was driven out by the army. He complements Sy on maintaining secrecy. He offers to collude on pussy prices, which is refused. He quips that they must do "special acts". He also notes that The Bella Union has craps, a game The Gem does not. Sy notes that they serve different markets, and that the rougher Swearengen caters to pioneers.
Business Temperment
Farnum will not rent a room to Calamity Jane, a single woman. Her friend Charlie Utter offers to check out so that he can have her room, which Farnum refuses because there is a waiting list.
Swearengen won't deal with Star, since he is too angry about the Bella Union.
Bullock cuts wood for the store prematurely. Now that he has a sunk cost, he wants the deal to be done.
Bullock then refuses to sell to Jack McColl, a foul mouthed drunk. Charley Utter remarks about this that "I'd be lousy at retail, I guarantee you that. I don't have the patience for it.". Star rejoins about his partner "I'm not sure how much future he's got [either]."
Asset Pricing
Swearengen, Star and Bullock finally settle their differences. Swearengen's offer is $1000 plus right of first refusal, an option to buy for $1000 plus cost of improvements, and an agreement to not offer gambling or any sales to the owner's of the Bella Union. Star bargains him down to only normal sales on the last point, and the deal is done.
After killing Garrett, Dority finds gold on the claim. The value of that asset now rises, but Alma Garrett is the new owner.
Celebrity
Charley Utter is offered money to set up a shooting tournament featuring his friend Wild Bill Hickock.
Reducing Competition
It turns out that the owners of The Bella Union were directed to their property by Farnum. He saw this as a way to reduce his hotel competition. When Swearengen finds out he calls him a "Judas goat". I wonder if there is an implicit threat to send him into the wilderness.
Underground Economies
Swearengen buys the services of faro dealer at the Bella Union with opium. Turns out the man is working both sides.
Asymmetric Information
Swearengen frets that he doesn't have "full information" about the connections of Bullock and Star, Hickock's entourage, and the Bella Union people. In truth, the three groups are unconnected before arriving in Deadwood, but do have common interests in opposing Swearengen.
Later, Trixie, Swearengen's favorite whore shaves the hard parts from the bottom of his feet with a straight razor. He remarks "Trust is a hell of a way to operate. Every fucking beating I'm grateful for. Every fucking one of 'em. Get all the trust beat out of you. Then you know how the fucking world is." The irony isn't lost ... Swearengen had beaten Trixie in the first episode for killing a john.
See my earlier posts about Deadwood.
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