Ecology and finance: A quest for congruency

John Maynard Keynes once argued that “animal spirits” can be used to guide human behaviour. In this paper we examine various ecological theories that can be utilised to explain behaviour in financial markets. Although animal behaviour has been used to describe financial markets (bull and bear markets, herding behaviour, etc.), we argue that many relevant ecological theories have been overlooked. We show that there is a potential to relate ecological principles and theories to financial markets, including foraging theory, marginal value theorem, prey size threshold, predation and foraging, the bet-hedging hypothesis, natural selection, weather and animal behaviour and propagule pressure.