Economics Gone Wild

Economics seems like a man-made concept beyond the comprehension of other intellectually inferior animals. Economists jokingly gave man the name Homo economicus due to man’s unique rational self-interest. Adam Smith once said, “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog”. As it turns out, economic theories are present in the animal kingdom and it’s more the rule than the exception.

Researcher Ronald Noë realized that animals weren't stuck wheeling and dealing with a single "partner"; they could shop around. If a partner cheated, lied, or took too much, they could move on to a better partner. That meant that the animal kingdom wasn't a prisoner's dilemma; it was a marketplace. That marketplace obeys the laws of supply and demand. Wasps are annoying creatures, they are like bees with the ability to sting infinitely and without any useful abilities. We hate wasps. What is interesting about them is that they perfectly demonstrate supply and demand. Female paper wasps are landlords for helper wasps. These shrewd landlords offer shelter to these helper wasps in return for help in taking care of her offspring. When the number of nests in an area is low, the female wasp demands more contributions from the helper wasps. When researches added more wasp nests in the same area, the female wasps required less work from the helper wasps because the helper wasps could chose which nest which require less work. This shows that price goes down when you flood the market, as the number of nests in an area determines the amount of work a helper wasp has to do.

The examples we have looked at are immediate yield decisions, yet most decisions humans make do not yield immediate outcomes, but benefit from them in the future. The stock market is a perfect example of this as patience is key in benefiting from it. This also exists in animals, somewhat. During foraging, the rate of energy gain is affected by factors such as travel time between food gains, time between foraging attempts (whether successful or not) or handling time of an item of prey. An experiment conducted by behavioral ecologists showed that when given a choice between large but delayed rewards or small short-term rewards, animals preferred large rewards as it lasted them a longer while than the short term rewards (energy gain per time).

To conclude this, economic decisions made by humans differ from those made by animals, but economic theories can be applied to human and animal behavior. This relates to the idea of neuroeconomics, which aims to reveal the neural process of economic decision making. This is why animal decision making is crucial in neuroeconomic research. Noë’s co-author Peter Hammerstein states that this research diminishes anthropocentric (belief that human beings are the most significant entity of the universe) ideas economists have: “We all learned not to treat animals in an anthropomorphic way, but a theory that was produced to explain human behavior nevertheless matters in biology.” Market forces play a role in the behavior of everything from plants to primates, birds to bugs. We just have to open our eyes, and most importantly, learn from them.

This article was inspired by: https://www.bloomberg.com/features/2017-biological-markets/?cmpId