Evolutionary Control of Economic Strategy in Fishes: Giffen Behaviour could be a Common Economic Strategy on the Earth?

The great geneticist Theodosius Dobzhansky said one of the most influential phrases on modern scientific thought: nothing makes sense except in light of evolution. Although most of economic theory has been developed independently of evolutionary thought, a study area of great interest is to apply tenets of evolution to understand the progress of certain economic phenomena in time. There is no doubt that this interdisciplinary approach could be very fertile, but many give rise to disagreements due to the interpretation of some economy process from an evolutionary approach, or certain evolutionary developments from an economic point of view.

In this paper, we seek a first stage to apply an experimental evolutionary approach to an economic problem. For this purpose, we have chosen the problem of the Giffen goods. A fundamental principle of microeconomics is the Law of Demand, which assures that as the price of a good increase, consumers demand for that good should decrease. On the contrary, a situation in which consumers respond to an increase in the price of a certain good by demanding more of it, this is known as Giffen behaviour.

Since Marshall’s time, the Giffen behaviour is one of the major controversies in economics, and the existence of Giffen goods are extensively discussed in most of economics courses. Many economists assume that the Giffen behaviour has never existed. For example, Stigler said that if an economist were trying to demonstrate the failure of Law of Demand in a particular market at a particular time, ‘he would be assured of immortality, professionally speaking’.However, several economists have performed theoretical approaches to the Giffen phenomenon and provide empirical evidence of the existence of Giffen behaviour.Read More.....