What is the difference between a generic “signal” and a “price signal”? What is a “price” in physiology? I think it would be interesting to see what insights an economic perspective of physiology would provide, but the constructs need to be defined pretty clearly so analogies can be drawn.
Another question is which basic assumptions embraced in economics can reasonably apply to the units of analysis in physiology (cells, etc.). Economists already have a hard enough time validating assumptions for humans.
What is the difference between a generic “signal” and a “price signal”? What is a “price” in physiology?
A price signal would need a few properties:
It would be paired with some physiological resource—it represents the price of something
It would be nonlocal, like e.g. a hormone—the point of prices is to coordinate in a distributed system
Local systems would increase/decrease their consumption of the resource in response to low/high price signal, and vice-versa for production
Some mechanism would make the price signal high when the resource is scarce, and vice versa, so that the amount of resource supplied matches up with the amount demanded.
Insulin is a good example: it acts as (inverse) price signal for glucose. It’s a hormone, and many cell types throughout the body increase/decrease their glucose consumption in response to insulin level. The beta cells in the pancreas act as a market maker, setting insulin levels so that glucose supply matches demand over the long run.
Another question is which basic assumptions embraced in economics can reasonably apply to the units of analysis in physiology (cells, etc.). Economists already have a hard enough time validating assumptions for humans.
This is a point which I think is severely under-appreciated both in and out of economics: it is often far easier to apply economic models to systems in biology than to humans. Humans have complicated, opaque decision-making procedures. We can’t observe those procedures directly, and have to make indirect predictions about their effects. Cells have decision-making procedures which we can directly observe and model, and people have already built many of those models.
Conversely, many of the debatable assumptions economics make about humans would have directly-observable effects in biological systems. If subsystems’ behavior can’t be described by utility functions, then that will directly result in resources consumed to produce things and then destroy them without using them. To the extent that such energy waste is minimized, the system behavior can be approximated by utilities. Another example: if subsystems’ revealed preferences aren’t concave, then that will directly result in instabilities in physiological behavior.
To really compare to an economic price signal, it should be a resource transfer from one actor to another—the price “paid” by a buyer is equal to the amount “received” by the buyer. I don’t see this for most physiological processes—they are signals, but more like feedback loop and control theory signals than they are price signals. There _are_ symbiosis/parasite cases that are closer to a price system, where one organism gives up something to another, in exchange for future benefits.
That’s not necessary for all results. It would be relevant to some—e.g. monetary economics (obviously), budgets constraints, and anything where the role of money as an incentive is crucial. But it’s not needed for e.g. much of price theory, which is the main sort of application I imagine. Indeed, if we look at Glen Weyl’s definition of price theory, it immediately sounds like it would be applicable to many problems in biology.
(Also, I suspect one could work around the absence of a budget constraint by directly observing the consumption function.)
Related: Fungus arbitrage https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6584331/
What is the difference between a generic “signal” and a “price signal”? What is a “price” in physiology? I think it would be interesting to see what insights an economic perspective of physiology would provide, but the constructs need to be defined pretty clearly so analogies can be drawn.
Another question is which basic assumptions embraced in economics can reasonably apply to the units of analysis in physiology (cells, etc.). Economists already have a hard enough time validating assumptions for humans.
A price signal would need a few properties:
It would be paired with some physiological resource—it represents the price of something
It would be nonlocal, like e.g. a hormone—the point of prices is to coordinate in a distributed system
Local systems would increase/decrease their consumption of the resource in response to low/high price signal, and vice-versa for production
Some mechanism would make the price signal high when the resource is scarce, and vice versa, so that the amount of resource supplied matches up with the amount demanded.
Insulin is a good example: it acts as (inverse) price signal for glucose. It’s a hormone, and many cell types throughout the body increase/decrease their glucose consumption in response to insulin level. The beta cells in the pancreas act as a market maker, setting insulin levels so that glucose supply matches demand over the long run.
This is a point which I think is severely under-appreciated both in and out of economics: it is often far easier to apply economic models to systems in biology than to humans. Humans have complicated, opaque decision-making procedures. We can’t observe those procedures directly, and have to make indirect predictions about their effects. Cells have decision-making procedures which we can directly observe and model, and people have already built many of those models.
Conversely, many of the debatable assumptions economics make about humans would have directly-observable effects in biological systems. If subsystems’ behavior can’t be described by utility functions, then that will directly result in resources consumed to produce things and then destroy them without using them. To the extent that such energy waste is minimized, the system behavior can be approximated by utilities. Another example: if subsystems’ revealed preferences aren’t concave, then that will directly result in instabilities in physiological behavior.
To really compare to an economic price signal, it should be a resource transfer from one actor to another—the price “paid” by a buyer is equal to the amount “received” by the buyer. I don’t see this for most physiological processes—they are signals, but more like feedback loop and control theory signals than they are price signals. There _are_ symbiosis/parasite cases that are closer to a price system, where one organism gives up something to another, in exchange for future benefits.
That’s not necessary for all results. It would be relevant to some—e.g. monetary economics (obviously), budgets constraints, and anything where the role of money as an incentive is crucial. But it’s not needed for e.g. much of price theory, which is the main sort of application I imagine. Indeed, if we look at Glen Weyl’s definition of price theory, it immediately sounds like it would be applicable to many problems in biology.
(Also, I suspect one could work around the absence of a budget constraint by directly observing the consumption function.)