Deadwood 17

Here's the economics and management roundup for this season's 5th episode of Deadwood.

Swearengen awakes from his bout with sepsis and stones to be told - as managers often are - that they'd better get back on the stick quickly as events have continued to spin away from control while they were gone.

Swearengen also encourages Doc Cochran to paint a rosy scenario for the public - lest Al be taken advantage of on his sickbed. Not uncommonly, asymmetric information is invented and spread by those who need a leg up on the competition.

At the Bella Union, Tolliver is surprised at the size of the cut he gets as a percentage of profits from the brothel he spun off, Chez Ami. He also wonders if they have increased the amount as a way to spread false information.

Tolliver also finds out from the prostitute Doris that Wolcott - the new and well-backed operator about town, and uneasy partner - enjoys certain sexual perversions. Tolliver sees this as a possible wedge that he can use to take advantage of Wolcott.

The new county commissioner, Jarry, brings a formal notice to Merrick the newspaperman to publish. The small print suggests that claims will be widely invalidated (leading to volatile asset prices). However, Merrick points out that the language is so murky as to make the document worthless. Jarry disagrees and demands that it go on the front page. Merrick accepts the charge and then takes the equally murky path of posting the notice on his door instead of publishing it. Jarry is almost immediately threatened with lynching - although the axis of Wolcott-spread rumors, Jarry's official pronouncement, and Tolliver's secret buying of claims appears to be working well.

As the proto-riot proceeds, Swearengen finds out that the cause is Jarry, and that he is allied with Swearengen's competitor Tolliver. Swearengen jumps two steps ahead to conclude that the territorial government knows of the Jarry-Tolliver alliance (there is no proof of this, other than the Wolcott-Jarry alliance appears to be using Tolliver). If the territorial government does know this, then it is incumbent on Swearengen that Jarry be protected - any harm to him will be blamed on Swearengen. This causes Al to enlist his recent enemy - the honest Sheriff Bulloch - to protect Jarry. This he does.

Later, Swearengen tells Bulloch that the territorial government cannot be behind this - they should be looking for bribes, not pulling strings. Naively Bulloch speculates that Tolliver is behind things, and Swearengen replies with clear vision that Tolliver is a natural ally against the territorial government. Swearengen correctly surmises that there is an outside force pushing events (he does not yet know that Wolcott represents uber-miner George Hearst).

A curious story arc is how the former tutor, Miss Isringhausen, continues to reduce the symmetry in information by telling Swearengen's aide Adams that Alma Garret has Swearenegen kill her husband. The latter part is correct, but the former is an invention. Her motives remain unclear, but she does seem to be successfully investing in building loyalty from Adams.

Comments

[cavalierlwt]

Very interesting webpage, congrats.
Your observations regarding the movers and shakers of Deadwood employing asymetric information is really spot on, and each week this is becoming a bigger and bigger factor in their futures. I can't help but notice how quickly Al Swearengen has grasped the importance of the news distribution in Deadwood, and has taken up a great interest in Mr.Merrick (the local newspaper publisher) and even greater interest in the newly arrived Telegraph operator. Real time information flow is such a powerful new concept for economics!

[Dave Tufte]

Gosh, I hadn't thought about that angle. It reminds me of Newman in Seinfeld saying that when you control the mail you control in-fa-mation!

[cavalierlwt]

Thought I throw out another tidbit from "EB Was Left Out"
Technically this is more about Marketing the pure Economics:
Tolliver sets up Con and Leon to market the new Chinese prostitutes. After first promoting them at the local bar, Con and Leon wind up studying a Focus Group of sorts --they stand outside and *secretly* watch the customers leave and eventually find a white man leaving the brothel (their target demographic is the white 'hoopleheads') and interviews him, ask how it was, was it worth it. I'm not sure Tolliver's exact intentions, but seeing as these new prostitutes could be considered comptetition with Tolliver's existing 'line' of prostitues, it looks like it's purely a move to gain market share (the Chinese prostitues cost a dime, compared to $5 for white prostitutes). Perhaps it's to weaken Swearengen's business for the possible upcoming transistion, via the arrival of Hearst and the corresponding gold claim buyouts,and the new political structure being foisted upon Deadwood.