NCPA - National Center for Policy Analysis

Free-Market Economy On Coral Reefs

May 7, 2002

Market forces appear to be at work on coral reefs, where fish that perform a cleaning service risk losing customers if they get sloppy. Scientists studying these fish conclude that healthy competition is sometimes important in ecology, helping to stabilize co-operation between species.

Researchers have seen a free-market economy at work in the interactions between cleaner wrasse and their client fish on the reefs of Ras Muhammad, on the Red Sea coast of Egypt.

The cleaners can "cheat" in this transaction, feeding on mucus or even the tissues of the client instead.

  • Client fish regularly visit cleaning stations where the wrasse nibble parasites from their bodies.
  • Fish were less likely to visit stations where they had previously been cheated or had to wait in a queue.
  • By exercising what amounts to consumer choice, the client fish promote healthy competition between all the cleaning stations, and this ensures good quality service.

Although predatory client species can attack the cleaners if they feel cheated, non-predatory clients are powerless to threaten revenge. So their arrangement would seem doomed -- cheating should become widespread, so long as the cleaners remove just enough parasites to keep clients coming back for further sessions when they get desperate. But market forces keep the cleaning standards high.

Source: Jon Copley, "Coral Reefs Operate Free-Market Economy," New Scientist, April 28, 2002, and Animal Behavior (vol. 63, p 547).


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