What literary device is used in the following lines? “Maybe I’ll have the luck to bring the forward half in. I should have some luck. No... You’ve violated your luck when you went too far outside” (116).

No it isn't dialogue. It is soliloquy. You may call it dramatic monologue. This device is used when the writer wants to make the readers aware of the inner conflicts of the Characters. This literary device unfolds the real state of mind of the old man here.