Thursday, August 04, 2011

Are Squirrels Rational?

Do squirrels respond to incentives?  If I lower the cost of eating, do squirrels eat more?  My experiment suggests that they do.

I spent a lot of time this summer in our backyard making a bird sanctuary for bird watching.  I would buy exotic bird feed only to have the squirrels perform acrobatics to eat it before the birds could arrive.  So I decided to lower the cost of eating for the squirrels.  I bought shelled peanuts, whole kernel corn, and sunflower seeds.  The little rodents ate that instead of my bird seed.

I believe that the squirrels face a downward sloping demand curve.  They will increase the amount of food that they will eat if I lower the price everything else being equal.

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