Bounty hunting

by Chris Bertram on August 10, 2004

The Onion “TechCentralStation”: on unleashing the power of the free market to capture Osama Bin Laden. Priceless!



ArC 08.10.04 at 8:33 am

Good times. Almost as good as the time DARPA floated Jim Bell’s Assassination Politics terrorism futures market plan.


John Quiggin 08.10.04 at 8:35 am

Amazing! They’ve got the URL and everything. And they have the TCS style perfect. You might almost think it was serious.


bad Jim 08.10.04 at 9:33 am

If the reward is enough for a few nukes, perhaps al Qaeda would sell Osama.


Dick Cheney 08.10.04 at 11:11 am

Sounds like an excellent idea. Mr. President I suggest we implement this one immediately as a no-bid contract with Halliburton

Oh, and another thing. Go fuck yourselves.


chris 08.10.04 at 11:59 am

Jim, don’t go there: someone would buy.


liberal japonicus 08.10.04 at 12:02 pm

Dick, you should know that Halliburton already has OBL in custody. This is obviously a way of getting around those messy no-bid contracts. No complaints about bugs in the food, no worries about overzealous security folks playing Barry the Baptist with detainees, just a direct 1B dollar check. If anyone out there hasn’t bought Halliburton stock, you are missing out!


Peter Murphy 08.10.04 at 12:10 pm

The language is Libetrarianism, but the tactics are Corporate Socialist. It’s just going to turn into another comany looking for a government handout. After all – who else is going to provide the 1 billion reward money?


dsquared 08.10.04 at 12:41 pm

It would have been better if they’d credited the article to “Jonathan Wild”


Aaron 08.10.04 at 1:58 pm

Hey, if a bounty worked for Jabba-the-Hut, then it must be a good plan.


fnook 08.10.04 at 3:14 pm

President Bush: I urge you to heed the call of James D. Miller, game theorist and Republican candidate for the Massachusetts State Senate, and offer a $1 billion bounty for bin Laden. Unleash the power of the free market and watch our loathsome international criminals and drug lords disappear.


praktike 08.10.04 at 3:25 pm

The key flaw in this marijuana-induced plan, of course, is that anyone likely to know where OBL is probably has some interesting ideas for what to do with that 1 billion …


praktike 08.10.04 at 3:29 pm

Then, of course, you have the problem of regulatory capture.

Say you adopt massive bounties as a standard feature of counterterrorism operations. This, naturally, will require some kind of regulatory apparatus to register groups and ensure that they’re following the law in some fashion.

What happens when the bounty hunter industry becomes powerful enough to take over this function?


roger 08.10.04 at 3:37 pm

A billion? Peanuts in todays entrepreneurial world!
Miller’s on the right track, but he isn’t thinking boldly enough. Why not have a market in terrorism in which Osama himself, and his disreputable band, could monetize their activity in terms of options they sell on future terroristic acts. Short sellers would then have a real incentive to prevent those acts, thus actually profitting from anti-terrorist activity. We are not talking of a one time only bounty, here, but of a continuing stream of revenue! Sure, if the actual TA (terrorist acts) are enacted, there might be some, shall we say, physiological damage, but here’s the second tier — the government can tax that activity to compensate victims of TAs! This is a win-win idea, which only requires that the tedious government regulatory agencies get out of the way!

Hedge your T notes with TA notes, and be the envy of the street!


Dirk 08.10.04 at 3:50 pm

If I am not completely mistaken than this is the same James Miller who write a pathetically whiny article for Forbes a few months ago, complaining that economics (!) departments at US universities were too far too the left to give him tenure. Now I am a pretty libertarian and free-markets (non-tenured) economist myself, and I can say with some confidence that he is full of it. In the same article he displays a staggering ignorance about the difference between tenuring someone and giving someone a non-tenured reappointment, and advocates attacking Iran. One might consider that the Smith folks didn’t want to give him tenure because he has a pathetic publication record and because he is a fool? Just wondering….


Maynard Handley 08.10.04 at 4:29 pm

praktike seems to hint at the main practical problem with this proposal — moral hazard. Once you start giving out a billion dollars for this sort of thing, how long is it before organizations start up with the explicit goal of acquiring say $1 billion for the PLO? I imagine there are plenty of would-be suicide-bombers who would be happy to have themselves installed as the capo-a-capo for a few years, instill a reign of terror, then surrender themselves up for the cause (and a billion dollars).


Rob 08.10.04 at 4:33 pm

What’s a billion dollars? That can hardly buy any sharks with lasers!


Tim Lambert 08.10.04 at 4:46 pm

But dirk, Miller was strongly recommended for tenure by none other than John Lott! What was Smith College thinking?


raj 08.10.04 at 5:05 pm

I wonder which of James Glassman’s clients the TCS was published for.


dsquared 08.10.04 at 5:26 pm

By the way, on behalf of “the markets”, if this proposal is ever enacted into law and any CT readers fancy getting together an ill-assorted bunch of mercenaries to chase up a 5% chance of a tip about Osama’s wherabouts, if you want to raise $20m from an initial public offering, please lose my phone number.


peter ramus 08.10.04 at 5:30 pm

The only failure of imagination in the plan is the reality-show tie in: Non-Survivor, with a billion dollar prize for the winner. This is some must-watch TV. Much, much cleaner than the Paddy Chayefsky fund-the-terrorists-directly scheme in Network.

…Rupert? Rupert?


Ted Barlow 08.10.04 at 5:39 pm

I’m reminded of a Bill Maher line, probably misremembered:

“The Pentagon announced today that they were raising the bounty on Osama bin Laden to $25 million dollars. And that only makes sense, because Afghan goat herders won’t even get out of bed for less than $10 million.”


Seth 08.10.04 at 5:43 pm

To mr dick cheney and the white house, watch out you don’t turn into one of these bored people:

Phill 08.10.04 at 6:00 pm

There is a kind of kooky way that this would make sense, the possibility of gaining $25 million is not going to be very attractive if a corporation was going to put in a major effort to get OBL.

The basic flaw here is that risk taking is very expensive for companies and this would be a very very risky business. The overwhelming probability here is that you invest millions and end up with not catching OBL. And even if you do catch OBL you are in the situation that those Y2K companies were in, what do you do for followon business?

This is just another example of ideology over common sense. Libertarianism is just Marxism by another name with a slightly different set of absolute beliefs that serve as a solution for every imaginable problem.

The solution to the OBL situation is much easier. First you sack the incompetents running the war on terror, you know Cheney, Rice, Rumsfeld, Wolfowitz, Bush and Feith. Next you replace them with people who are not obsessed with settling family scores, do not expose CIA agents or burn moles to score political points and do not issue endless streams of politically motivated terror alerts.


Ophelia Benson 08.10.04 at 6:41 pm

That’s pretty funny all right – especially since, as Peter Murphy implied above, what’s so ‘free market’ about that $1 billion reward? That ain’t consumer dollars, that’s money ponied up by the gummint. I love that idea of free market – give them entrepreneurs enough gummint money and see what a brill job they’ll do. Oh.


Pedro 08.10.04 at 7:17 pm

Because Jonathan Idema and his gang did such a bang-up job. Let’s get another thousand mercenaries running around Afghanistan, kidnapping guys with long beards and hanging them by their feet from the ceiling.

Setting aside the question of whether it’s a God-given right to wander around a sovereign country with sunglasses and a gun, what makes anyone think that the guys attracted by such an offer would have even the slightest clue about how to track down a guy living in deepest Pashtunistan?


Zizka 08.10.04 at 8:01 pm

Melville’s “Confidence Man” includes a proposal to put Christian missions out to bid on “sound Wall Street principles”.

Practically ever cliche of prosperity theology, management gurus, self-help, futurology, New Age, etc., etc. was already there in Melville’s book almost 150 years ago. Everyone should read it.

It’s a hard book to read because it doens’t follow novelistic rules. Think of it as post-modern.


Barry Freed 08.10.04 at 9:49 pm

re. Pedro’s post

You know, it might not be a bad idea. Not to catch UBL, though. But to lure a great many wingnuts out of the USA more or less permanently. It’d be worth at least $1 billion.


Ophelia Benson 08.11.04 at 1:36 am

“Think of it as post-modern.”

Better, think of post-modernists as Melvillians. After all, who had the idea first?


Alex Tabarrok 08.11.04 at 4:37 am

After you have finished laughing you just might want to read my paper on how the bounty hunter system works in the United States (recently published in the Journal of Law and Economics). PDF at the URL below if you have access to the JLE or email me for a copy.

Here is the title and abstract:


Claremont-McKenna College

George Mason University
On the day of their trial, a substantial number of felony defendants fail to appear. Public police have the primary responsibility for pursuing and rearresting defendants who were released on their own recognizance or on cash or government bail. Defendants who made bail by borrowing from a bond dealer, however, must worry about an entirely different pursuer. When a defendant who has borrowed money skips trial, the bond dealer forfeits the bond unless the fugitive is soon returned. As a result, bond dealers have an incentive to monitor their charges and ensure that they do not skip. When a defendant does skip, bond dealers hire bounty hunters to return the defendants to custody. We compare the effectiveness of these two different systems by examining failure-to-appear rates, fugitive rates, and capture rates of felony defendants who fall under the various systems. We apply propensity score and matching techniques.


Keith 08.11.04 at 2:05 pm

Great post, Alex. And now, I’m going to add some great thoughts that Tabarrok had at his blog, because they should also be posted here.

“I’m puzzled, don’t the gang know that the United States has been putting bounties on terrorists since 1984? Or that Qusay and Uday Hussein were located due to a reward – as was Al Qaeda leader Khalid Sheikh Mohammed, as was Ramzi Yousef, the mastermind of the 1993 WTC bombing as were the terrorists responsible for the destruction of Pan Am 103?”

Let me answer that, Alex: No, the gang does not know, because they’d rather ridicule than learn. A pretty sad performance from these “intellectuals.”


Ryan 08.11.04 at 5:27 pm


I think you’re underestimating “the gang.” Bill Maher quotations are the sine qua non of thoughtful discourse.


dsquared 08.11.04 at 6:04 pm

Thanks for the plug, Alex. Now perhaps, you’d care to tell us how many publicly quoted bounty hunting companies there are in the USA who have raised money from “the markets”. Because that was a) the subject of the article Chris linked to, and b) the author’s only rationale for raising the bounty forty-fold.


Eric 08.12.04 at 2:29 am

Why should Alex enumerate the companies that have already raised money that way when the point of the TCS article was that raising it 40-fold would lead to the creation of such companies? Why would such companies exist if this approach to anti-terrorism had never been tried before?

[(circa 1912, in my dreams)
Senator X: I propose we have an income tax and use it to fund government programs.
Senator Y: Ridiculous idea. Can you tell me how many programs are currently being funded that way? None!? Well then, obviously it won’t work.]

The part about capturing drug lords is definitely anti-libertarian, though. As to whether it is free market or not, clearly it is using the incentives of a free market, including risk assessment, profit motivation, competition, etc., to solve a problem that -incidentally – government agencies have not solved, even with well over a billion in agency funding. The funding is clearly not free market (though it should probably be pointed out, since so many people seem to forget, that the government does not have its own money: it gets it from us). That is far from being inconsistent, though, since few (if any) libertarians have ever proposed privatizing defense – even anarcho-capitalist David Friedman calls that “the hard problem”. But there is a big difference between funding and administering a program. The GI Bill, for example, is a broadly supported program that provides funding to GI’s to select the school of their choosing. Suppose someone proposed to replace the funding with a gov’t-administered university (Federal University) in order to “save money”. Does anyone suppose for one minute that the program would continue to be successful or popular? Anyone here familiar with the funding and building of the coastal forts like McHenry in Baltimore? Note also that the DoD doesn’t build its own planes, tanks, or ships. There are good reasons for that. Why not apply the same lessons to terrorism?


Ken Houghton 08.12.04 at 3:33 am

As I noted to Alex privately, there are structural problems with offering $1B.

But there is a related conceptual problem as well, which I will attempt to explain slowly so that keith understands the two reasons why everyone is making fun of it.

Think back to the scene in _Liar’s Poker_ that gave the book its title. John Gutfreund, offered a $1MM bet by one of his traders, raises him to $10MM–at which point the trader puts his bill back in his pocket.

The reason the trader backs down is that the raise is CREDIBLE–just as the raise from $5MM to $25MM was credible in the post 11Sep01 world. Independent analysis easily understands the risk/reward scenario was altered.

What happens if I offer to bet Alex $10MM? Alex may bother to check Forbes listings, or the genealogy charts of Corning or Houghton-Mifflin just to make certain, but the odds are good he just LAUGHS.

The offer isn’t credible.

Neither is a jump from $25MM to $1B. In the absence of new information, the paradigm hasn’t shifted, the risk/reward doesn’t change, and NO ONE WILL BELIEVE the shift.

The second reason it is not to be taken seriously is that, if there is truly a free market, IT WON’T MAKE INVESTORS MONEY.

Again, this is a simple risk/reward analysis. In the absence of information to the contrary (which is available but ignored here for simplification purposes), the chance of collecting the $1B is dependent upon (a) the skills of your bounty hunters and (b) the NUMBER OF FIRMS hunting. Not necessarily in that order.

Remember, this is Winner-take-all: firms that do not catch ObL return nothing. The equation for Rate of Return is roughly r(0,max)*(prob. capturing ObL).

Miller is NOT postulating a monopoly consortium in which all possible searchers work for the same firm. He’s arguing “free market.” The free market will lead to people LOSING MONEY–free to s/t/a/r/v/e/choose, as it were.

Who wins in this scenario, in the BEST case? (1) the bounty hunters who contract for expenses plus a percentage of the reward, (2) the bounty hunters who contract fixed-rate and do NOT find ObL, and (3) the one group of investors who sponsor the group that finds ObL, PROVIDED the expenses and fees at a reasonable rate of return are less than the final payout.

Who loses? (1) ALL THE OTHER INVESTORS, (2) any bounty hunter who takes an expenses plus fee contract, does not find ObL, and who passed up other work (opportunity cost), and (3) the taxpayers, who almost undoubtedly paid more than they had to due to the discontinuity.

Then consider the not-best cases: ObL dies and is turned in by allies or like-minded personnel, ObL is captured by someone OTHER THAN the Bounty Companies, ObL remains uncaptured because he is not Che, etc.

In all of the not-best cases, ALL of the investors and most of the bounty hunters lose.

In summary, (1) the discontinuity IN AND OF ITSELF makes the offer less credible, and it will therefore be severely discounted (the probability that extraneous incremental costs will be incurred in proving that your company earned $1B is significantly greater than zero) and (2) the free market, if truly free, will lead to a significant wasting of resources and drain on capital. (The latter would, of course, have to be added into the calculated return for investors–so any investment group assuming that $1B will be paid will overvalue their property.

(This is the other half of the lottery problem: if fair value of a ticket is $1 for a $12MM jackpot, does that mean a $24MM jackpot makes the value of the ticket $2–or does it mean that more people are likely to play, and the value needs to be adjusted because the probability of spliting the jackpot is higher?)

So we made fun of the idea, which may or may not have been stolen by Miller and which causes more problems than it solves.

What Miller proposed is the opposite of Greg Easterbrook’s Op-Ed proposal in the NYT a while back that an approximately revenue-neutal 50c/gallon gas tax be enacted, the neutrality being used in a combination to reduce other taxes and increase funding for alternative energy research.

Easterbrook proposed a MARGINAL change in the face of new information (monies spent buying oil fund Middle Eastern terrorists who are willing to attack the U.S.). Miller suggests a discontinuity in a void of information as a solution.

Easterbrook’s proposal may not finally pass muster, but it passes a sniff test. Miller’s doesn’t, which is why we feel free to make fun of it.


dsquared 08.12.04 at 3:57 am

Ken is making exactly the correct point which I hinted at in an earlier joke. It is absolutely, limitingly unlikely that private capital markets would regard a bunch of ill-assorted mercenaries with a theory as a marketable proposition.

You see, the difference between “a group of private bounty hunters with a 5% chance of capturing Osama” and “a group of fantasists, ex-servicemen and idiots with no chance at all”, is not obvious to the naked eye; with all its resources, the entire CIA was unable to distinguish between “a charismatic leader with a 5% chance of leading a stable Iraq” and “a crook”.

The capital market does not, as a matter of fact, provide money for this kind of long-shot, which is part of the reason why some of us may yet enjoy a comfortable retirement.


Eric 08.12.04 at 1:46 pm

So, since one individual doesn’t have $10M means that the government couldn’t have $1B, and the fact that most firms may lose money in a given market means that none of them will be able to raise capital? Surely, nobody will ever invest in a software company since few people can tell the difference between professional engineers and a bunch of Harvard students (who haven’t even graduated!) with an idea of competing against IBM. The nerve! Or between wild-eyed celebrity worshippers who want to run their own network and a guy with an ambition to build a 24 hour news network (yeah, like anyone would watch that!). Or between this idiot McCaw who wants to build a phone network based on technology that even AT&T passed on and these other idiots that want to build a nationwide fiber optics network and carry long distance. Michael Milken? Never existed.


dsquared 08.12.04 at 8:22 pm

Think, for God’s sake, man. How do you do due diligence on the freaking A-Team?


Ken Houghton 08.13.04 at 12:22 pm


All of your examples come from REGULATED industries with barriers to entry, where an investor would be reasonably certain that a small, finite number of firms are going to provide and thrive. (Note that no one gave McCaw any funding while AT&T had a monopoly on telephone service. In both his case and Milken’s, they went into an ESTABLISHED market and expanded it–precisely the type of “value add” that is not present in the proposal.)

In the proposed scenario, we would have to assume (1) that ONLY experienced bounty hunters can find ObL and (2a) that it will take a combination of them to do it AND (2b) that the combination will be less than 40 hunters.

(We know from the current $25MM market that no individual bounty hunter believes it worth his/her while to search for ObL, therefore any combination that offers the individuals less than $25MM each will not be accepted by them.)

There are, realistically, NO barriers to entry to bounty hunting (incidental expenses such as travel create some minor barriers, but it is clear that those are incidental even in the context of $25MM). So your professional bounty hunters would be competing with multiple Pakistani, Afghan, Iraqi, and other hunters who are likely to know the area better–or who have to be b/r/i/b/e/d/ paid from the potential reward to help.

The proposal is not a MARKET scenario, so it cannot be a viable “free market” solution.


Keith 08.13.04 at 8:58 pm

Ken managed to say something interesting…

“So your professional bounty hunters would be competing with multiple Pakistani, Afghan, Iraqi, and other hunters who are likely to know the area better—or who have to be b/r/i/b/e/d/ paid from the potential reward to help.”

Of course, this makes Miller’s point, to some degree.

I’ll try to type even slower, Ken, so you can keep up….


D-squared, you really have no idea on how you’d do due diligence on the “A-team”? Think, Man!:

How do you do due diligence on any security personnel? You look at their record. A group of black-haired former special-forces guys who speak Pashtun and Arabic and who give themselves melanin treatments to give their skin the right shade have a better shot than some guys with shotguns and a pickup truck. Did this really not occur to you? Perhaps if you didn’t limit yourself to not having “a good word for anyone,” you’d think of these things more.:)


Eric 08.14.04 at 12:09 am

Hmmm… I had no idea that software development was a regulated industry *now*, much less in 1986. Thanks for the tip.

It looks like the only position being defended is that capital markets never invest in startups, they only invest in existing companies with proven cash flow or startups in existing industries. Which begs the question – how did those existing companies or industries start up in the first place? We must conclude from the existence of companies that were once deemed “risky” that capital markets do invest in companies that may have the appearance of being risky to outside observers. In the US in 1999-2000, 574k plants (“plants” being both locations and entire businesses) opened and nearly 543k closed (similar data for each of the years from 1990-2000 available in the Stat Abstract), and there were 37-40k business bankruptcies in that same period. Assuming that at least some of those were publicly traded companies, and if by “risky” we mean “not everyone is guaranteed profitability and in fact most will not make it because barriers to entry are minute”, I’d say that markets finance risky investments regularly.

Regarding whether or not the $1B dollars would change the situation, I think the answer deserves more analysis than has been given it here. The offer in and of itself does not yield more information. However, information is a scarce good that must be produced. Local Pakistanis aren’t interested in the $25 M because they could never enjoy any significant portion of it before they met an untimely death by murder for revenge or by suicide to find relief from the isolation required to avoid murderers. If I had a 5% chance of getting that $25M, I might be able to raise $1.25M. My own labor and travel costs would eat through that fairly quickly, and I would be lucky to hire a few translators and ex-GIs. We would have to rely on existing, word-of-mouth information or knock on doors and grease palms – a very low yield, high cost means of gathering information that would deplete the money raised quickly. On the other hand, if I had a similar chance at $1B, I might be able to raise $50 M. Hmmm … with that kind of scratch, I might be able to afford to assign surveillance teams on several UBL family members and associates, buy a UAV with eavesdropping equipment designed to my specs, analyze data, and make a few $1M bribes. I could literally generate information by associating the correspondence between known UBL associates and wireless traffic picked up by the UAV until I narrowed his location down. Someone else might propose to trap UBL by offering unrefined nuclear material and designs actually purchased from AQ Khan. A Pakistani villager growing tired of UBL’s attitude might realize that he could afford to move his extended family to his own private island and live in comfort and safety on $1B.

I think there are problems with the idea of offering a $1B bounty, but only Fester’s Place has defended those to my liking. Here, it seems that the only grounds of protest is that there will be no change from the raised bounty. I think that blowback is more likely to be a worse outcome than no change at all (which seems to have been taken up in the last few posts). What happens when an over exuberant Duane Chapman wannabe goes to Pakistan and starts beating villagers until they talk? Is the short term brouhaha worth the long term advantage of shutting UBL up? I also think that moral hazard is a possibility after the first successful demonstration of the method. How do we really know UBL is the head of al Qaeda and not some clean-handed puppet master who controlled UBL the same way UBL controlled Mullah Omar? It’s unlikely but possible, and $1B certainly increases the rewards to someone with the intelligence and balls to pull off a stunt like that.


dsquared 08.15.04 at 4:01 pm

On the other hand, if I had a similar chance at $1B, I might be able to raise $50 M.

Once more, no you wouldn’t.

It is comparatively easy to prove that you have a computer program which works. How would you go about proving that you have a 5% chance of capturing Osama Bin Laden? How would I, as a potential investor, distinguish between you with a 5% chance and someone else with no chance?


Jonathan Kulick 08.17.04 at 7:55 pm

There’s an op-ed very similar to Miller’s in The Washington Times:

I suppose that there’s no problem that can’t be solved by throwing more money at it. $1 million isn’t enough of an incentive to prove the Poincare Conjecture ( Why not offer $100 million? That will certainly meet the reservation wage of all of those mathematicians who couldn’t be bothered for a mil.

Except of course, for public schools. It’s absurd to think that paying teachers more might attract more capable people.

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