The existence of Giffen behaviour (i.e. the opposite situation to the Law of Demand in which consumers respond to a rising price of a certain good by demanding more of it) associated with poor consumers is one of the major controversies in economics. However, economists rarely consider that nothing makes sense except in light of evolution. In this paper, we prove the existence of Giffen behaviour in animals that exhibit no intelligent reasoning. Sardines feed on phytoplankton, and zooplankton. If the amount of phytoplankton is greater than zooplankton, then Sardines fit the Law of Demand, but if the amount of phytoplankton is smaller, the Sardines apparently show Giffen behaviour. Evolutionary population genetics models show that Giffen behaviour has more adaptive value than follow the Law of Demand under resource scarcity. Since overwhelming animal species live in poverty, Giffen behaviour may be the common economic strategy on the Earth.
Saturday, April 25, 2015
A recent article in Oceanography "Evolutionary Control of Economic Strategy in Fishes: Giffen Behaviour could be a Common Economic Strategy on the Earth?" by Eduardo Costas, Beatriz Baselga-Cervera, Camino García-Balboa and Victoria Lopez-Rodas quotes an article that I published with Charles van Marrewijk (Giffen Goods and the Subsistence Level, History of Political Economy (1990) 22 (2), pp. 145 148). The article in Oceanography provides an unexpected link to Earth Economics