Should behavioral economics include animals?

Behavioral economics is gradually winning over more converts. It’s now – justifiably - being applied to the most unlikely facets of human existence. So the natural (to me) question arises: should it be applied to animals too.

I interpret animals broadly. Not just the warm-blooded ones we know and love like dogs, kittens, dolphins, elephants and other such cuddlies. I also mean to include the cold-blooded ones like snakes, insects, spiders, weevils, alligators. After all they’re all God’s creatures right?

Here’s my thinking. The study of animal behavior became politically correct many moons ago. It’s now quite fashionable to study animal intelligence. The cutting edge in that area is now the emotional intelligence of animals and their sensitivity to each other and to us humans. So why not their level of business acumen?

That might seem like a step too far. But animals clearly deal with scarcity. Business acumen can be boiled down to just two components; one is your propensity to use resources – not just money but things like how frugal you are with twigs and mud in making a nest.

The other component is the animal propensity to add value, or to innovate. Right now that is a very hot topic of discussion amongst the animal ethology crowd. Being frugal and wise with resources obviously has a lot of use for any animal, humans included. And now that we know that even crows and chimps use tools, a whole new vista has been opened in the fevered debate about how to spur innovation (in humans).

Such a discussion opens up the possibility, if not the inevitability that animals have social cultures, as indeed they obviously do, and by extension, economies. That means they do business.

We might look down our snouts at animals’ lack of MBAs (not that they necessarily give humans any business sense, as has been strongly brought home to us in the serial financial crises of the last few years). But it looks awfully like animals have their own version of business thinking and models, even though we don’t understand them just yet.

This might sounds a little outré. But let’s take another tack. Do animals consider and deal with risk? Yep, patently so. Do they have mental risk models? Yep again. Do they make provision for rainy days? Yes again. Hmm, this is starting to sound an awful lot like insurance in human society.

Ok so maybe if we stretch we can make a case that animals have their own kind of economies, have mental risk models that work pretty well and make business decisions, just not using prices (just like we did when we used to use shells as mediums of exchange not so long ago). Does that butter any parsnips, as the ancient Brits used to say? In other words, can we make such knowledge useful to us truly?

Well for starters, how similar are our risk and business models? Are we indeed the most evolved species in these areas? Or do they know something we don’t? Have they evolved in different directions? What do they know about risk that we don’t? How do they make decisions under uncertainty?

What could all this tell us about how we are going to evolve in the future? Do animals’ business and risk models show us how to reconcile business risk with sustainability in ways that we could harness so we don’t pollute or nuke our way to extinction? How do they define and achieve higher economic returns for their prodigious efforts? Think the business intelligence of swarms (bees, termites, pigeons).

Senior NASA boffins just pronounced that we would probably find alien life in the next 20 years. Could the study of behavioral economics in animals shed light on how other forms of life in the universe might have evolved from a risk, business and sustainability perspective? Is the business acumen of alien animals of interest to the alien life scientists at NASA? If not should it be?

There’s a school of thought that says that consciousness is an emergent property of life, any life. Could business thinking also be an emergent property too since it deals with scarcity and innovation? If so, behavioral economics could yet become an even hotter topic