Differential Investment Research Articles

Rethinking Social Relationships: The Differential Investment of Resources Model of Social Development

The empirical evidence concerned with the centrality of social relations to individual functioning across adulthood continues to accumulate. Theoretical development about age-related changes in social relationships, however, has lagged behind. In particular, existing theories either do not account for the influence of the developmental context, or are difficult to examine empirically because they do not posit specific testable mechanisms. We present a new conceptual model that we believe effectively incorporates much of the existing empirical work. The Differential Investment of Resources (DIRe) model has five distinct features. First, the model distinguishes between different types of ‘social ties’ by defining two crucial dimensions - closeness and kinship. Second, the investment of time and energy is defined as the core mechanism that explains the formation and maintenance of social ties. Third, individual characteristics, categorized as capacities, motivations, and skills, determine the amount, direction, and efficacy of the time and energy invested. Fourth, the model incorporates the developmental context: (a) in its effect on the social opportunity structure; (b) in its effect on time and energy; and (c) in its effect on the individual. Additionally, the social opportunity structure itself is determined by the individual’s existing social network ties (i.e., social capital). Finally, the model describes how different types of ties, in turn, affect individual characteristics via social functions (social exchanges, social evaluations, and social influences). The proposed model will not only stimulate a healthy new debate in the field, but will also provide a theoretical basis for future research and hypothesis-testing.

Stochastic differential investment and reinsurance games with nonlinear risk processes and VaR constraints

This paper investigates a class of non-zero-sum stochastic differential investment and reinsurance games between two insurance companies. We allow both insurers to purchase a proportional reinsurance contract and invest in risky and risk-free assets. When applying the generalized mean–variance premium principle in determining reinsurance premium, the surplus process becomes quadratic in the retained proportion of the claims. The optimization criterion of each insurer is to maximize the expected utility of the insurer’s terminal performance relative to that of his competitor. In addition, we incorporate dynamic Value-at-Risk (VaR) constraints in the optimization problems of both insurers to satisfy the capital requirements from regulators. The results show that this game problem can be converted to solving a system of nonlinear equations by means of dynamic programming principle and Karush–Kuhn–Tucker (KKT) conditions. Specifically, when both insurers are constant absolute risk aversion (CARA) institutions and the reinsurance premium principle reduces to the expected value principle, we derive the simplified expressions for the Nash equilibrium strategies. Finally, we use some numerical examples to illustrate the effects of several model parameters on the Nash equilibrium strategies under three different scenarios.

Non-Zero Sum Stochastic Differential Investment And Financial Market Game Under Model Uncertainty

Non-Zero Sum Stochastic Differential Investment And Financial Market Game Under Model Uncertainty

Being white is a full time job? Explaining skin tone gradients in income in Mexico

ABSTRACT While scholarship on wage discrimination has confirmed that ‘racism’ is persistent, recent insights indicate that ‘colorism’ – the idea that lighter skin tones are rewarded more compared to darker ones, all else equal – is often more relevant in some societies where race or ethnicity are less salient markers. In this article, the following underlying theoretical mechanisms are discussed and are subjected to an empirical test: differential investment in human capital, i.e. education; variation in occupational status, i.e. being employed in indoor white-collar vs outdoor blue-collar jobs; and concentration in richer vs poorer regions. Mexico, known as a country where race and ethnicity generally are less salient categories for social stratification while skin tone is more important, is used as a case. Based on regression analyses on the most recent 2017 wave of the National Survey on Discrimination in Mexico, we show that there is an effect of skin tone on income that is explained by differences in education, occupational status and, to a lesser extent, regional concentration. Triangulating the findings with data from 2010 indicate that if colorism is at work, it are the lightest tones that are privileged, not the darkest ones that are penalised.

Individual differences of conflict monitoring and feedback processing during reinforcement learning in a mock forensic context

This study investigated individual differences of conflict monitoring (N2 component), feedback processing (feedback negativity component), and reinforcement learning in a discrimination learning task using a mock (fictitious) forensic scenario to set participants in a semantic task context. We investigated individual differences of anxiety-related, impulsivity-related traits and reasoning ability during trial-and-error learning of mock suspect and nonsuspect faces. Thereby, we asked how the differential investment of cognitive-motivational processes facilitates learning in a mock forensic context. As learning can be studied by means of time-on-task effects (i.e., variations of cognitive processes across task blocks), we investigated the differential investment of cognitive-motivational processes block-wise in N = 100 participants. By performing structural equation modeling, we demonstrate that conflict monitoring decreased across task blocks, whereas the percentage of correct responses increased across task blocks. Individuals with higher reasoning scores and higher impulsivity-related traits relied rather on feedback processing (i.e., external indicators) during reinforcement learning. Individuals with higher anxiety-related traits intensified their conflict monitoring throughout the task to learn successfully. Observation by relevant others intensified conflict monitoring more than nonobservation. Our data highlight that individual differences and social context modulate the intensity of information processing in a discrimination learning task using a mock forensic task scenario. We discuss our data with regard to recent cognitive-motivational approaches and in terms of reinforcement learning.

Differential investment in pre- and post-mating male sexual traits in response to prolonged exposure to ambient UVB radiation in a fish

Increasing UVB radiation (UVB) reaching earth's surface following stratospheric ozone depletion is linked to serious consequences for organisms. While studies have focused on direct cytocidal and immunomodulatory effects of UVB, indirect consequences for fitness-related life-history traits are largely unexplored, although knowledge is needed to understand organismal responses to climate change. The present study investigates the effects of developmental exposure to enhanced, but ecologically relevant, ambient UVB levels on growth (body size), parental behavior (nest-building), fitness-enhancing traits of pre-mating (sexual ornamentation) and post-mating (sperm traits) sexual selection as well as their interrelationships in male three-spined sticklebacks (Gasterosteus aculeatus). Moreover, potentially underlying direct UVB effects, testicular antioxidant capacity (TAC) and testes and skin melanization were quantified. Juvenile full-siblings were split into two groups and raised until adulthood in a semi-natural set-up under light conditions including either natural (UVBnormal) or elevated UVB levels (UVBenhanced). When becoming reproductive, males were kept individually before data collection took place at their reproductive peak. The results showed that males from the UVBenhanced-group were smaller than their brothers from the UVBnormal-treatment, whereas no treatment differences were observed for sexual ornamentation, sperm traits and TAC. Moreover, UVB-stressed males built their nests faster and the relationship between body size and nest size was negative for UVBenhanced-males while being positive for UVBnormal-males. These results demonstrate that, depending on physical state, UVB-stressed males adjusted their behavior to some extent. Additionally, a trade-off between the investment in pre- and post-mating traits was found for UVBenhanced-males, i.e. the intensity of their breeding coloration was negatively correlated with sperm number whereas this relationship was reversed for UVBnormal-males, thus showing an interaction between pre- and post-mating traits regarding exposure treatment. The interaction provides first experimental evidence that differential allocation to energetically demanding pre- and post-mating components of male fitness is triggered by a key environmental stressor of climate change.

Children’s Gender and Investments from Nonresident Fathers

Evidence suggests that fathers have stronger ties to sons than daughters, which may result in differential investments in their children. This paper investigated whether girls’ gender restricts their access to fathers’ contributions if they do not live together. The data used were the 1994–2008 March/April Match Current Population Survey Child Support Supplements, a large, nationally representative sample which identifies child support eligible mothers of all marital statuses and collects information on nonresident fathers’ financial and social investments in their children. Results for court-mediated outcomes such as the existence and amounts of child support orders showed that courts do not allocate child support differentially by child gender. Small but suggestive effects of child gender were found on fathers’ post-dissolution investments, but these effects disadvantaged boys rather than girls.

Differences in perceived predation risk associated with variation in relative size of extra-pair and within-pair offspring.

Extra-pair paternity (EPP) is a widespread phenomenon in birds. Researchers have long hypothesized that EPP must confer a fitness advantage to extra-pair offspring (EPO), but empirical support for this hypothesis is definitively mixed. This could be because genetic benefits of EPP only exist in a subset of environmental contexts to which a population is exposed. From 2013 to 2015, we manipulated perceived predator density in a population of tree swallows (Tachycineta bicolor) breeding in New York to see whether fitness outcomes of extra-pair and within-pair offspring (WPO) varied with predation risk. In nests that had been exposed to predators, EPO were larger, longer-winged and heavier than WPO. In nonpredator nests, WPO tended to be larger, longer-winged and heavier than EPO, though the effect was nonsignificant. We found no differences in age, morphology or stress physiology between extra-pair and within-pair sires from the same nest, suggesting that additive genetic benefits cannot fully explain the differences in nestling size that we observed. The lack of an effect of predator exposure on survival or glucocorticoid stress physiology of EPO and WPO further suggests that observed size differences do not reflect more general variation in intrinsic genetic quality. Instead, we suggest that size differences may have arisen through differential investment into EPO and WPO by females, perhaps because EPO and WPO represent different reproductive strategies, with each type of nestling conferring a fitness advantage in specific ecological contexts.

Interactive effects of social environment, age and sex on immune responses in Drosophila melanogaster.

Social environments have been shown to have multiple effects on individual immune responses. For example, increased social contact might signal greater infection risk and prompt a prophylactic upregulation of immunity. This differential investment of resources may in part explain why social environments affect ageing and lifespan. Our previous work using Drosophila melanogaster showed that single-sex social contact reduced lifespan for both sexes. Here, we assess how social interactions (isolation or contact) affect susceptibility to infection, phagocytotic activity and expression of a subset of immune- and stress-related genes in young and old flies of both sexes. Social contact had a neutral, or even improved, effect on post-infection lifespan in older flies and reduced the expression of stress response genes in females; however, it reduced phagocytotic activity. Overall, the effects of social environment were complex and largely subtle and do not indicate a consistent effect. Together, these findings indicate that social contact in D.melanogaster does not have a predictable impact on immune responses and does not simply trade-off immune investment with lifespan.

Physiological dynamics, reproduction-maintenance allocations, and life history evolution.

Allocation of resources to competing processes of growth, maintenance, or reproduction is arguably a key process driving the physiology of life history trade‐offs and has been shown to affect immune defenses, the evolution of aging, and the evolutionary ecology of offspring quality. Here, we develop a framework to investigate the evolutionary consequences of physiological dynamics by developing theory linking reproductive cell dynamics and components of fitness associated with costly resource allocation decisions to broader life history consequences. We scale these reproductive cell allocation decisions to population‐level survival and fecundity using a life history approach and explore the effects of investment in reproduction or tissue‐specific repair (somatic or reproductive) on the force of selection, reproductive effort, and resource allocation decisions. At the cellular level, we show that investment in protecting reproductive cells increases fitness when reproductive cell maturation rate is high or reproductive cell death is high. At the population level, life history fitness measures show that cellular protection increases reproductive value by differential investment in somatic or reproductive cells and the optimal allocation of resources to reproduction is moulded by this level of investment. Our model provides a framework to understand the evolutionary consequences of physiological processes underlying trade‐offs and highlights the insights to be gained from considering fitness at multiple levels, from cell dynamics through to population growth.

Target Price Optimism, Investor Sentiment, and the Informativeness of Target Prices

This paper provides large sample evidence that financial analysts’ target prices are more informative in periods of low investor sentiment compared to high sentiment. While prior research argues that target prices have differential investment value depending on analysts’ use of sophisticated or heuristic valuation models, we find that these differences are largely explained by investor sentiment. We find that the investment value of target prices based on both sophisticated and heuristic valuation models is close to zero in periods of high sen- timent. Return predictability is highest for target prices based on sophisticated valuation models during periods of low sentiment, but only slightly higher than for heuristics. Also, target price errors are lower for low sentiment. In periods of low sentiment, when concurrent market prices are below intrinsic values and target prices are above market prices due to analysts’ optimism, target prices are more reflective of intrinsic values and hence more informative. In addition, we find that investors do not understand the differential informativeness of target prices. Market reactions to target price revisions do not reflect the higher informativeness in low sentiment. Rather, investors overreact to target price revisions in high sentiment, potentially fueling the build-up of bubbles.

Differential reproductive investment in co-occurring oviparous and viviparous common lizards (Zootoca vivipara) and implications for life-history trade-offs with viviparity

Live-bearing reproduction (viviparity) has evolved from egg-laying (oviparity) independently many times and most abundantly in squamate reptiles. Studying life-history trade-offs between the two reproductive modes is an inherently difficult task, as most transitions to viviparity are evolutionarily old and/or are confounded by environmental effects. The common lizard (Zootoca vivipara) is one of very few known reproductively bimodal species, in which some populations are oviparous and others viviparous. Oviparous and viviparous populations can occur in sympatry in the same environment, making this a unique system for investigating alternative life-history trade-offs between oviparous and viviparous reproduction. We find that viviparous females exhibit larger body size, smaller clutch sizes, a larger reproductive investment, and a higher hatching success rate than oviparous females. We find that offspring size and weight from viviparous females was lower compared to offspring from oviparous females, which may reflect space constraints during pregnancy. We suggest that viviparity in common lizards is associated with increased reproductive burden for viviparous females and speculate that this promoted the evolution of larger body size to create more physical space for developing embryos. In the context of life-history trade-offs in the evolution of viviparity, we suggest that the extent of correlation between reproductive traits, or differences between reproductive modes, may also depend on the time since the transition occurred.

Maternal investment in last-laid eggs does not compensate for hatching asynchrony in a seabird.

Maternal and environmental effects can have profound effects on offspring performance by generating variation in offspring phenotypes, independent of genetic effects. Within avian broods, differential maternal investment of resources across the laying sequence is thought to be an adaptive strategy to modulate competitive hierarchies induced by hatching asynchrony. In this study, we evaluated the relative importance of maternally derived within-clutch variation and the asymmetric post-hatching environment for growth and survival of common tern (Sterna hirundo) siblings. We experimentally manipulated hatching order, resulting in chicks from last-laid eggs hatching first and vice versa. Although both initial age and size asymmetries were larger within experimental than control broods, the early survival of last-hatched chicks was similar between groups. Initial positive effects of egg size disappeared as siblings approached fledging. Ultimately at fledging, both within-brood growth and cumulative survival patterns were similar between experimental and control broods, suggesting that the effects of systematic variation of egg constituents (e.g., maternally derived yolk hormones) and egg size are too subtle and largely overwhelmed by the effects of hatching asynchrony. Therefore, we conclude that variation in offspring phenotypes is pre-dominantly determined by the social environment experienced post-hatching. Maternal effects may further fine-tune phenotypic variation in response to varying environmental conditions, but this needs to be tested through empirical studies in which multiple maternal effects are measured simultaneously under different environmental conditions.

The Gender Wage Gap Opens Long before Motherhood. Panel Evidence on Early Careers in Switzerland

According to a popular argument in economics, the gender wage gap persists not because of employer discrimination against women, but because of the differential investment of fathers and mothers into paid work and the household. We test this argument by comparing the evolution of wages between men and women before the onset of family formation and gendered household specialization. We use a cohort study of young adults for Switzerland (TREE 2000–2014) and match the two sexes on their intellectual ability and educational attainment before they enter the labour market. We then use the ensuing survey waves to account for human capital and job characteristics as well as for values towards work and family. We replicate our analysis with a second panel study of Swiss graduate students. We find in both cohort studies an unexplained gender wage gap of between 3 to 6 percent in favour of men. This result suggests that young women earn lower wages than young men with the same productive characteristics long before they have children. Translated into annual wages, this means that young women lose out on half a monthly wage each year in comparison to young men.

Boldness at the nest predicts foraging and diving behaviour of female but not male African penguins

Optimal foraging theory suggests that the environment (e.g. distribution of resource patches) will shape an individual's decision to exploit the resource available or explore other locations. Together with the environment and the social context, individual characteristics such as personality have been recently discovered to affect behaviour, offering new insights in the field of behavioural ecology. In many species, personality types differ in breeding success, and foraging behaviour could potentially mediate the influence of personality on reproductive output. A recent study conducted on African penguins, Spheniscus demersus, revealed that bold and shy individuals raised chicks with different growth rates. Here we investigated whether strategies of resource acquisition vary with personality, that is, boldness degree, which may explain the differences in breeding success previously observed in this endangered species. Over 3 years, we deployed GPS loggers, sometimes in conjunction with time–depth recorders, on chick-rearing penguins on Bird Island, Algoa Bay, South Africa, and recorded their boldness degree using a standard human approach protocol. Bolder females, but not males, foraged following a more sinuous path than shyer ones. Similarly, wiggle frequency and the total vertical distance travelled underwater increased with female boldness degree. These results suggest different resource acquisition strategies between personality types in female African penguins. However, none of the foraging or diving behaviour characteristics influenced breeding success. These findings suggest that personality may influence breeding success through other mechanisms (e.g. chick provisioning). Our study indicates that, in this species, some nest behaviours (i.e. proxy of personality) may link with foraging and diving behaviours more than others. Nevertheless, the sex-specific adaptation observed in foraging and diving behaviour may result from a differential investment in the breeding season and reduce intraspecific competition for food in this species.

Ideological Responses to Settler Colonialism: Political Identities in Post-Independence Tunisia

What explains variation in secular and Islamist political identity and behavior? I argue that local variation in colonial settlement encouraged the development of distinct Tunisian political identities across localities. Using data on political mobilization at the moment of independence, I find that differential colonial investments in local land and schools produced divergent secular and Islamist political identities. This relationship operates through two mechanisms; first, high local land expropriation by the French weakened the religious land tenure system (the waqf system) and traditional Islamic schools in those areas. Second, the increased presence of agricultural colonial settlers is also correlated with a greater presence of local French schools and higher enrollment of native Tunisians in French primary education. This variation in colonial experience also informs contemporary patterns of partisanship and social cleavages in Tunisia.

Differential investment in male accessory glands: lessons from a marine fish with alternative reproductive tactics

Male reproductive accessory glands play a number of important roles, including enhancing fertilization success in competitive contexts. Theory predicts that males experiencing greater sperm competition risk (i.e. those adopting the opportunistic tactic) should invest more in accessory glands and ejaculate. However, empirical data show the opposite pattern; males experiencing lower sperm competition risk (i.e. those adopting the conventional guarder tactic) invest more in accessory glands. This pattern has possibly emerged because these organs also function to optimize sperm economy and sometimes also play a role in parental care, which provides more benefits to guarder males. To tease apart these contrasting patterns, we examined tactic-specific investment in and histology of accessory glands, as well as the effect of their fluids on sperm performance in guarder males, using the plainfin midshipman fish (Porichthys notatus). We found that midshipman accessory glands consist of two distinct structures: nodes and lobules, differing in organization and secretory characteristics both between structures and male types. Like other fishes with alternative reproductive tactics, guarder males invested more in accessory glands and in lobules specifically compared to opportunistic sneaker males. Fluids from both lobule and nodes increased sperm velocity in guarder males. Moreover, guarder males increased their investment in accessory glands across the breeding season. Our results suggest that accessory glands may have multiple functions and may even play a role in parental care and olfactory signalling. Our study emphasizes the diversity in form and function of accessory glands and highlights the importance of these organs in reproduction.

Sex differences in immunity in a natural population of bush-cricket (Orthoptera: Phaneropterinae)

Immune defense often differs between sexes, where females generally exhibit higher individual immunity than males. Such sexually dimorphic immune defense stems from differential investment into reproduction as females allocate more resources into mating. Contrary to prevailing predictions, some studies have found that females exhibit a weaker immune response than males. In this study, I examined both humoral (phenoloxidase activity and lytic activity) and cellular (encapsulation ability) immune parameters including cuticular melanization in a field population of a bush-cricket (Isophya reticulata) that is an endemic species in the northeastern part of Turkey. As expected, females showed a higher phenoloxidase activity than males, whereas there were no sex differences in lytic activity. Males expressed a higher encapsulation response than females. These results indicated that sex differences in immunity may be variable and females may not always exhibit higher immunity than males. Another interesting finding of this study was a positive relationship between stridulatory file length, phenoloxidase activity, and wing melanization. This finding demonstrated a connection between size differences in stridulatory apparatus that affect sexual signaling and immune response.

Approximation of a class of non-zero-sum investment and reinsurance games for regime-switching jump–diffusion models

This work develops an approximation procedure for a class of non-zero-sum stochastic differential investment and reinsurance games between two insurance companies. Both proportional reinsurance and excess-of loss reinsurance policies are considered. We develop numerical algorithms to obtain the approximation to the Nash equilibrium by adopting the Markov chain approximation methodology. We establish the convergence of the approximation sequences and the approximation to the value functions. Numerical examples are presented to illustrate the applicability of the algorithms.

Differential investment in brain regions for a diurnal and nocturnal lifestyle in Australian Myrmecia ants.

Animals are active at different times of the day. Each temporal niche offers a unique light environment, which affects the quality of the available visual information. To access reliable visual signals in dim-light environments, insects have evolved several visual adaptations to enhance their optical sensitivity. The extent to which these adaptations reflect on the sensory processing and integration capabilities within the brain of a nocturnal insect is unknown. To address this, we analyzed brain organization in congeneric species of the Australian bull ant, Myrmecia, that rely predominantly on visual information and range from being strictly diurnal to strictly nocturnal. Weighing brains and optic lobes of seven Myrmecia species, showed that after controlling for body mass, the brain mass was not significantly different between diurnal and nocturnal ants. However, the optic lobe mass, after controlling for central brain mass, differed between day- and night-active ants. Detailed volumetric analyses showed that the nocturnal ants invested relatively less in the primary visual processing regions but relatively more in both the primary olfactory processing regions and in the integration centers of visual and olfactory sensory information. We discuss how the temporal niche occupied by each species may affect cognitive demands, thus shaping brain organization among insects active in dim-light conditions.