Does Market Theory Apply to Biology?

Summary of: Does Market Theory Apply to Biology?

Author(s) / Editor(s)

Although significant differences remain between biological and human economic markets, such well known biological phenomena as mating markets and partner markets can be understood more fully by looking through the lens of economic models.

Publication Reference

Published in/by
Genetic and Cultural Evolution of Cooperation, Peter Hammerstein, Ed., MIT Press in Cooperation with Dahlem Universityh Press


  • "There are striking parallels between the signaling games studied in biology and economics, the value of education and the peacock's tail having much in common."
  • Although there are significant differences between biological and economic markets, the use of modified economic models can shed light on biological cooperation.

Because sperm is cheap and eggs are costly and because both males and females can take genetic advantage by cheating on their partners or males can gain genetic advantage by abandoning offspring to be raised by others, mating behaviors in a wide range of species exhibit characteristics economists see in markets. Male songbirds share territory to mutual advantage through signals mediated by plumage color and cleaner-fish provide more thorough parasite-removing service to "customer" fish who come from far away (and are more likely to switch to other cleaners. The more general notion of biological markets grew from mating market theories with the recognition that mutualism and other partnerships were possible outside mating. Biological markets continue to differ in significant ways from the pure markets of economic theory because other biological agents do not have human cognitive capabilities, because the characteristics of individual traders are important in biology and not in economic markets where price and not plumage is the key signal, complete contracts are enforceable at no cost are assumed in economics and not possible in biological populations.