Behavioral economists study humans to figure out how we react to things like prices, supply and demand, and signaling, to name a few. But some researchers are taking that field of study to a non-human level and they’re discovering some very interesting phenomena. Could animals possibly be entrepreneurial? Might they set up a market to exchange commodities? Do they respond to the fundamental law of demand? Surely they’re not smarter than us . . .
Let’s take a look at a market that has developed in the coral reefs of the Red Sea. Dr. Redouan Bshary, a behavioral ecologist, spent more than a year on an Egyptian beach studying coral reef fish and he made an interesting discovery. Cleaner wrasses—small fish that eat dead skin and parasites off of other fish—set up “cleaning stations” to serve “clients,” who line up for their services. What’s more, not all clients get equal treatment. Some fish don’t roam much; they’re “resident” clients over which cleaner wrasses essentially have a monopoly. They get the basic package: short cleaning session, no massage, and, occasionally, a bite. “Floaters” migrate over large areas and can shop around for a favorite cleaning station. They get longer cleanings, some massage, and are rarely bitten. Plus, they move to the front of the line over resident clients. And, if a cleaner wrasse senses another fish is watching, they up their game—presumably as a marketing strategy. A fish might have as many as 2,000 transactions per day and yet they’re constantly thinking about their client list.
Cleaner wrasses exhibit completely rational behavior that improves their chances of long-term survival and leads to optimum cleaning for coral reef residents. I imagine that if humans were running the show, we would set up the Bureau of Coral Reef Cleaning and assign each fish to a cleaning station while giving each wrasse their own cleaning district. There would be no incentive to offer anything other than the basic service and, presumably, the coral reef would be less clean.
In a somewhat similar fashion, researchers recently found that schools of choice better match students and schools, leading to higher overall parent satisfaction. Using data from Arkansas conversion charter schools (those that replace a failing school and enroll students only from the same school zone) and open-enrollment charter schools (which parents are free to choose regardless of where they live), the research discovered a positive relationship between open-enrollment schools and parental satisfaction. The implication, according to the researchers, is that increasing the degree of parental choice could increase the quality of schools available.
And yet the status quo, with its irrational assignment of students to schools based on where they live, continues to be fiercely defended. Maybe it’s time to capitalize on a little competitive pressure like our undersea friends.