Can irrational behaviour maximise fitness?

Behavioural models for both humans and other animals often assume economic rationality on the part of decision makers. Economic rationality supposes that outcomes can be assigned objective values within a stable valuation framework and that choices are made to maximise a decision maker’s expected payoff. Yet, both human and animal behaviour is often not economically rational. Here, we compare economically rational making strategies with a strategy (trade-off contrasts) that has been proposed to account for decision-making behaviour in humans that departs of axiomatic rationality. We model the fitness of these strategies in a simple environment where choices are made on repeated occasions, there is stochastic fluctuation in the choices available at any given time, and uncertainty about what choices will be available in the future. Our results show that, for at least some of the model parameter space, non-rational decision strategies achieve higher fitness than economically rational strategies. The differences were comparable in magnitude to selection differentials observed in nature.     

Economics of Grassland Conversion to Cropland in the Prairie Pothole Region

Abstract: Much of the remaining grassland, particularly in North America, is privately owned, and its conversion to cultivated cropland is largely driven by economics. An understanding of why landowners convert grassland to cropland could facilitate more effective design of grassland‐conservation programs. We built an empirical model of land‐use change in the Prairie Pothole Region (north‐central United States) to estimate the probability of grassland conversion to alternative agricultural land uses, including cultivated crops. Conversion was largely driven by landscape characteristics and the economic returns of alternative uses. Our estimate of the probability of grassland conversion to cultivated crops (1.33% on average from 1979 to 1997) was higher than past estimates (0.4%). Our model also predicted that grassland‐conversion probabilities will increase if agricultural commodity prices continue to follow the trends observed from 2001 to 2006 (0.93% probability of grassland conversion to cultivated crops in 2006 to 1.5% in 2011). Thus, nearly 121 million ha (30 million acres) of grassland could be converted by 2011. Conversion probabilities, however, are spatially heterogeneous (range 0.2% to 3%), depending on characteristics of a parcel (e.g., soil quality and economic returns). Grassland parcels with relatively high‐quality land for agricultural production are more likely to be converted to cultivated crops than lower‐quality parcels and are more responsive to changes in the economic returns on alternative agricultural land uses (i.e., conversion probability increases by a larger magnitude for high‐quality parcels when economics returns to alternative uses increase). Our results suggest that grassland conservation programs could be proactively targeted toward high‐risk parcels by anticipating changes in economic returns, such as could occur if a new biofuel processing plant were to be built in an area.     

A quantitative genetic model of altruistic selection

Summary A quantitative genetic model for evolution by altruistic selection based on family selection models used in agricultural genetics is presented. A quantitative genetic version of Hamilton's rule is derived which indicates that evolution will proceed in an altruistic direction whenever the ratic of between-to within-family (or group) heritability exceeds the absolute value of the within-to between-family selection differential ratio. This ratio of heritabilities is equal to a ratio which includes only the phenotypic and genetic intraclass correlation coefficients, thus no heritabilities actually need to be estimated in determining the possibility of altruistic evolution. The phenotypic intraclass correlation can be estimated with standard analysis of variance methods. The genetic intraclass correlation may be estimated by the average within-group coefficient of relationship using genealogical data, by Wright's F-statistics using allele frequency data, or by a theoretical model based on a knowledge of interaction and mating patterns. Selection differentials may be measured by the regression of relative fitness, or one of its major components, on the phenotype of interest. Selection can be considered altruistic only if within-and between-family selection differentials have opposite signs. Consideration of empirical data on genetic and phenotypic intraclass correlations indicates that evolution may proceed in an altruistic direction even if the within-family selection differential exceeds the one between families, especially in situations in which pertinent environmental factors are randomly distributed among families.     

Preventing the Spread of Invasive Species: Economic Benefits of Intervention Guided by Ecological Predictions

Abstract:  Preventing the invasion of freshwater aquatic species is the surest way to reduce their impacts, but it is also often expensive. Hence, the most efficient prevention programs will rely on accurate predictions of sites most at risk of becoming invaded and concentrate resources at those sites. Using data from Vilas County, Wisconsin (U.S.A.), collected in the 1970s, we constructed a predictive occurrence model for rusty crayfish ( Orconectes rusticus ) and applied it to an independent data set of 48 Vilas County lakes to predict which of these were most likely to become invaded between 1975 and 2005. We nested this invasion model within an economic framework to determine whether targeted management, derived from our quantitative predictions of likely invasion sites, would increase the economic value of lakes in the independent data set. Although the optimum expenditure on lake protection was high, protecting lakes at this level would have produced net economic benefits of at least $6 million over the last 30 years. We did not attempt to determine the value of nonmarket benefits of protection; thus, our results are likely to underestimate the total benefits from preventing invasions. Our results demonstrate that although few data are available early in an invasion, these data may be sufficient to support targeted, effective, and economically rational management. In addition, our results show that ecological predictions are becoming sufficiently accurate that their application in management can produce net economic benefits.     

Dynamics of insect resistance in Bt-corn

The development of genetically modified Bt-corn, incorporating various toxin genes from Bacillus thuringiensis that act as a chemical defense against insect pests, such as the European Corn Borer, provides farmers with a new pest management option. However, the emergence of insect resistance is a threat to the continued use of Bt-corn. The United States Environment Protection Agency (US EPA) has developed planting strategies, for preventing insect resistance by planting a mixture of Bt- and non-Bt-corn. Decisions about the exact proportion of Bt- and non-Bt-corn are based on complex spatially explicit mathematical models using detailed biological assumptions about the population genetics and life history of the European Corn Borer. We develop an alternative simpler model for the spread of resistance based on the logistic growth model, which we believe has utility in situations where it is impossible or impractical to estimate the different life history and genetics parameters required by more detailed models. We use our model to investigate the US EPA’s planting rules for Bt-corn and find that short-term economic behavior is likely to lead to these rules not being followed. Our results add weight to existing work on this problem. We also investigate the economics of planting Bt-corn in markets where consumers do and do not differentiate between the modes of production for the corn. We find that Bt-corn appears to be economic in markets that do not differentiate and uneconomic in markets where consumers do differentiate.     

The role of sponge competition on coral reef alternative steady states

Sponges constitute an abundant and functionally important component of coral reef systems. Given their demonstrated resistance to environmental stress, it might be expected that the role of sponges in reef systems under modern regimes of frequent and severe disturbance may become even more substantial. Disturbances have recently reshaped the community structure of many Caribbean coral reefs shifting them towards a state of persistent low coral cover and often a dominance of macroalgae. Using competition and growth rates recorded from Glover's Atoll in Belize, we parameterise a mathematical model used to simulate the three-way competition between sponges, macroalgae and coral. We use the model to determine the range of parameters in which each of the three species might be expected to dominate. Emergent properties arise from our simple model of this complex system, and these include a special case in which heightened competitive ability of macroalgae versus coral may counter-intuitively prove to be advantageous to the persistence of corals. Importantly, we show that even under scenarios whereby sponges fail to invade the system, inclusion of this third antagonist can qualitatively affect the likelihood of alternative stable states - generally in favour of macroalgal dominance. The interplay between multi-species competition and predation is complex, but our efforts highlight a key process that has, until now, remained unexplored: the extent to which sponges dissipate algal grazing pressure by providing generalist fish with an alternative food source. We highlight the necessity of identifying the extent by which this process takes place in tropical systems in order to improve projections of alternative stable states for Caribbean coral reefs.     

Intergenerational aspects of ecotax reforms – An application to Germany

In a model of overlapping generations and majority voting, we analyze an ecotax reform consisting of the tax rate and the budgetary rule. Revenue can be recycled through a lump-sum transfer or a reduction in pension contributions. Our theoretical results as well as the calibration of our model to the German economy show that the median voter's preferred tax rate may exceed the efficient rate. This holds whenever income of the decisive voter is sufficiently high compared to the average income, as rich individuals benefit more from a reduction in pension contributions than they are harmed by an increase in ecotaxes. The calibration confirms that the median voter prefers the earmarking of tax revenue for reductions in pension contributions to the alternative lump-sum transfer. This is quite an accurate prediction of the situation in Germany. Aging of society as expected for Germany lowers the ecotax in the political equilibrium below its optimal level.     

An Economic Assessment of Wildlife Farming and Conservation

Abstract:  The supply-side approach to conservation, as recommended by economists, prescribes the provision of cheap substitutes for wildlife commodities in an effort to lower the price of such commodities and reduce harvesting pressure. We developed a theoretical economic model to examine whether wildlife farming or ranching indeed contributes to conservation. We first present the naïve economic model that lends support to the supply-side approach. This model is incomplete because it fails to capture the fact that most wildlife markets are not perfectly competitive (instead, models are characterized by a small number of suppliers who have a certain degree of market power), which also implies that it fails to incorporate strategic interaction between suppliers. We then present an alternative model of the (illegal) wildlife trade that reflects imperfect competition and strategic interaction, and demonstrate that wildlife farming may stimulate harvesting (or poaching) rather than discourage it. By applying the model to the case of rhinoceros poaching and ranching, we demonstrate the potentially ambiguous outcomes of rhinoceros-ranching initiatives—wild rhinoceros stocks may recover or suffer from additional depletion, depending on key parameters and the type of competition on output markets. We also show that this type of ambiguity may be eliminated when policy makers restrict quantities of farmed output through a quota system; in that case, introducing wildlife farming will unambiguously promote conservation. In the absence of such accompanying regulation, however, policy makers should be careful when stimulating wildlife farming and be aware of potentially adverse consequences.     

Economic growth,international trade,and the depletion or conservation of renewable natural resources

Conservation of renewable natural resources and promotion of economic growth are both sustainable development goals. Here, we study the interdependency between economic growth, international trade, and the use of renewable natural resources—under alternative institutional settings of either open access or full property rights—in an endogenous growth model. We find that if the resource is depleted over time, consumption growth is reduced. Economic growth and international trade only impact resource use when the resource is harvested under full property rights. Then, widening international trade can lead countries to shift from conservation to depletion. Changes in the institutional setting of resource use in one country may have repercussions on trading partners. Our results indicate potential trade-offs between the sustainable development goals and imply that policies focusing on resource use or trade (e.g., international trade bans or certified trade) are not sufficient to prevent resource depletion.     

Which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities?

The hedonic property value model is among our foremost tools for evaluating the economic consequences of policies that target the supply of local public goods, environmental services, and urban amenities. We design a theoretically consistent and empirically realistic Monte Carlo study of whether omitted variables seriously undermine the method’s ability to accurately identify economic values. Our results suggest that large gains in accuracy can be realized by moving from the standard linear specifications for the price function to a more flexible framework that uses a combination of spatial fixed effects, quasi-experimental identification, and temporal controls for housing market adjustment.     

Use of Population Viability Analysis to Evaluate CITES Trade‐Management Options for Threatened Marine Fishes

Abstract: Achieving multiple conservation objectives can be challenging, particularly under high uncertainty. Having agreed to limit seahorse (Hippocampus) exports to sustainable levels, signatories to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) were offered the option of a single 10‐cm minimum size limit (MSL) as an interim management measure for all Hippocampus species (≥34). Although diverse stakeholders supported the recommended MSL, its biological and socioeconomic implications were not assessed quantitatively. We combined population viability analysis, model sensitivity analysis, and economic information to evaluate the trade‐off between conservation threat to and long‐term cumulative income from these exploited marine fishes of high conservation concern. We used the European long‐snouted seahorse (Hippocampus guttulatus) as a representative species to compare the performance of MSLs set at alternative biological reference points. Our sensitivity analyses showed that in most of our scenarios, setting the MSL just above size at maturity (9.7 cm in H. guttulatus) would not prevent exploited populations from becoming listed as vulnerable. By contrast, the relative risk of decline and extinction were almost halved—at a cost of only a 5.6% reduction in long‐term catches—by increasing the MSL to the size reached after at least one full reproductive season. On the basis of our analysis, a precautionary increase in the MSL could be compatible with sustaining fishers' livelihoods and international trade. Such management tactics that aid species conservation and have minimal effects on long term catch trends may help bolster the case for CITES trade management of other valuable marine fishes.     

Analytical Solutions to Trade‐Offs between Size of Protected Areas and Land‐Use Intensity

Abstract: Land‐use change is affecting Earth's capacity to support both wild species and a growing human population. The question is how best to manage landscapes for both species conservation and economic output. If large areas are protected to conserve species richness, then the unprotected areas must be used more intensively. Likewise, low‐intensity use leaves less area protected but may allow wild species to persist in areas that are used for market purposes. This dilemma is present in policy debates on agriculture, housing, and forestry. Our goal was to develop a theoretical model to evaluate which land‐use strategy maximizes economic output while maintaining species richness. Our theoretical model extends previous analytical models by allowing land‐use intensity on unprotected land to influence species richness in protected areas. We devised general models in which species richness (with modified species‐area curves) and economic output (a Cobb–Douglas production function) are a function of land‐use intensity and the proportion of land protected. Economic output increased as land‐use intensity and extent increased, and species richness responded to increased intensity either negatively or following the intermediate disturbance hypothesis. We solved the model analytically to identify the combination of land‐use intensity and protected area that provided the maximum amount of economic output, given a target level of species richness. The land‐use strategy that maximized economic output while maintaining species richness depended jointly on the response of species richness to land‐use intensity and protection and the effect of land use outside protected areas on species richness within protected areas. Regardless of the land‐use strategy, species richness tended to respond to changing land‐use intensity and extent in a highly nonlinear fashion.     

Assessing model structure uncertainty through an analysis of system feedback and Bayesian networks.

Ecological predictions and management strategies are sensitive to variability in model parameters as well as uncertainty in model structure. Systematic analysis of the effect of alternative model structures, however, is often beyond the resources typically available to ecologists, ecological risk practitioners, and natural resource managers. Many of these practitioners are also using Bayesian belief networks based on expert opinion to fill gaps in empirical information. The practical application of this approach can be limited by the need to populate large conditional probability tables and the complexity associated with ecological feedback cycles. In this paper, we describe a modeling approach that helps solve these problems by embedding a qualitative analysis of sign directed graphs into the probabilistic framework of a Bayesian belief network. Our approach incorporates the effects of feedback on the model's response to a sustained change in one or more of its parameters, provides an efficient means to explore the effect of alternative model structures, mitigates the cognitive bias in expert opinion, and is amenable to stakeholder input. We demonstrate our approach by examining two published case studies: a host-parasitoid community centered on a nonnative, agricultural pest of citrus cultivars and the response of an experimental lake mesocosm to nutrient input. Observations drawn from these case studies are used to diagnose alternative model structures and to predict the system's response following management intervention.     

Econometric modeling of fisheries with complex life histories: Avoiding biological management failures

Economics of the fishery has focused on the wastefulness of common pool resource exploitation. Pure open access fisheries dissipate economic rents and degrade biological stocks. Biologically managed fisheries also dissipate rents but are thought to hold biological stocks at desired levels. We develop and estimate an empirical bioeconomic model of the Gulf of Mexico gag fishery that questions the presumptive success of biological management. Unlike previous bioeconomic life history studies, we provide a way to circumvent calibration problems by embedding our estimation routine directly in the dynamic bioeconomic model. We nest a standard biological management model that accounts for complex life history characteristics of the gag. Biological intuition suggests that a spawning season closure will reduce fishing pressure and increase stocks, and simulations of the biological management model confirm this finding. However, simulations of the empirical bioeconomic model suggest that these intended outcomes of the spawning closure do not materialize. The behavioral response to the closure appears to be so pronounced that it offsets the restriction in allowable fishing days. Our results indicate that failure to account for fishing behavior may play an important role in fishery management failures.     

A Cross-National Analysis of How Economic Inequality Predicts Biodiversity Loss

Abstract:  We used socioeconomic models that included economic inequality to predict biodiversity loss, measured as the proportion of threatened plant and vertebrate species, across 50 countries. Our main goal was to evaluate whether economic inequality, measured as the Gini index of income distribution, improved the explanatory power of our statistical models. We compared four models that included the following: only population density, economic footprint (i.e., the size of the economy relative to the country area), economic footprint and income inequality (Gini index), and an index of environmental governance. We also tested the environmental Kuznets curve hypothesis, but it was not supported by the data. Statistical comparisons of the models revealed that the model including both economic footprint and inequality was the best predictor of threatened species. It significantly outperformed population density alone and the environmental governance model according to the Akaike information criterion. Inequality was a significant predictor of biodiversity loss and significantly improved the fit of our models. These results confirm that socioeconomic inequality is an important factor to consider when predicting rates of anthropogenic biodiversity loss.     

What floats your boat? Preference revelation from lotteries over complex goods

We examine a type of lottery used to distribute some publicly held resource access rights. The lottery provides participants with the opportunity to choose among a set of simple gambles over multi-attribute goods. Participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning. When lottery winnings are multi-attribute goods, lottery outcomes provide sufficient information to estimate hedonic prices, marginal utility, and marginal rates of substitution among attributes. We develop a model for characterizing preferences from this information set. We apply our model to Idaho?s Four Rivers Whitewater Recreation Lottery, which allows applicants to apply for one permit among a large set of alternative river/day combinations that provide varying river and weather characteristics. This lottery structure shows promise as a foundation for economic experiments for preference revelation.     

A Revealed Preference Approach to Estimating Supply Curves for Ecosystem Services: Use of Auctions to Set Payments for Soil Erosion Control in Indonesia

Abstract:  To supply ecosystem services, private landholders incur costs. Knowledge of these costs is critical for the design of conservation-payment programs. Estimating these costs accurately is difficult because the minimum acceptable payment to a potential supplier is private information. We describe how an auction of payment contracts can be designed to elicit this information during the design phase of a conservation-payment program. With an estimate of the ecosystem-service supply curve from a pilot auction, conservation planners can explore the financial, ecological, and socioeconomic consequences of alternative scaled-up programs. We demonstrate the potential of our approach in Indonesia, where soil erosion on coffee farms generates downstream ecological and economic costs. Bid data from a small-scale, uniform-price auction for soil-conservation contracts allowed estimates of the costs of a scaled-up program, the gain from integrating biophysical and economic data to target contracts, and the trade-offs between poverty alleviation and supply of ecosystem services. Our study illustrates an auction-based approach to revealing private information about the costs of supplying ecosystem services. Such information can improve the design of programs devised to protect and enhance ecosystem services.     

Community Conservation and the Future of Africa's Wildlife

Abstract: The term community-based conservation (CBC) refers to wildlife conservation efforts that involve rural people as an integral part of a wildlife conservation policy. The key elements of such programs are that local communities participate in resource planning and management and that they gain economically from wildlife utilization. In part, CBC is seen as an alternative to the more exclusionary protectionist policies of the past, which often alienated rural people from conservation efforts. The new approach acts to make rural people a constituency for wildlife and therefore active backers of wildlife protection. Africans, however, are struggling with severe social and economic problems such as poverty, long-standing economic stagnation, rapid population growth, and environmental deterioration. Because of the pressures that Africans face in making a living, the application of CBC may not occur as readily or as successfully as its advocates would hope. It may also be that the approach is being oversold. I use brief case studies from Madagascar, Ethiopia, Zimbabwe, and Swaziland to highlight the possible conflicts between rural people's economic needs and the implementation of community conservation. In addition, the CBC literature treats the role of protection vaguely, as it does the question of what might happen if CBC fails to achieve wildlife conservation goals. Community-based conservation is an obvious advance over past practices because of its inclusive philosophy, but if rural people accept CBC because of its economic benefits, they may reject it at some point in the future if a better economic alternative is presented. Thus, CBC programs can work to produce a better relationship between wildlife and people, but only a vast improvement in the lives of rural Africans will ultimately produce a more secure future for the continent's wildlife.     

To court or not to court: reproductive decisions by male fiddler crabs in response to fluctuating food availability

For males, courting and foraging are often behavioral alternatives, which take time and consume energy. When males have a possibility of mating with receptive females, there may be a behavioral trade-off between courtship and feeding; the outcome of which may be affected by male physiological condition and food availability. Although many mathematical models and empirical studies suggest that the expression of male courtship signals are condition-dependent, decisions about courtship and mating strategies in relation to food availability have not attracted much attention. In this study, we tested whether daily changes in food availability affect males’ decisions about whether to court. We conducted experiments with the fiddler crab Uca lactea by providing males with additional food every other day. In food-supplemented enclosures, males did not increase courtship activity on the days when food was supplemented. However, they built more courtship structures (semidomes) and waved more on the days when they were not given additional food. Male size had a strong influence on the number of days the males courted. We also tested whether the frequency of surface mating, as an alternative reproductive tactic, decreased when food was supplemented. Contrary to our expectation, the number of males that exhibited the surface-mating tactic increased when food was supplemented whereas the number of mate-searching females did not change. Our findings in this field study suggest that reproductive decisions by male fiddler crabs are affected by fluctuating food availability and present body condition, and the alternative mating tactic of this species may be more frequently used by males under good condition.     

Tree cover in sub-Saharan Africa: rainfall and fire constrain forest and savanna as alternative stable states

Savannas are known as ecosystems with tree cover below climate-defined equilibrium values. However, a predictive framework for understanding constraints on tree cover is lacking. We present (a) a spatially extensive analysis of tree cover and fire distribution in sub-Saharan Africa, and (b) a model, based on empirical results, demonstrating that savanna and forest may be alternative stable states in parts of Africa, with implications for understanding savanna distributions. Tree cover does not increase continuously with rainfall, but rather is constrained to low (<50%, "savanna") or high tree cover (>75%, "forest"). Intermediate tree cover rarely occurs. Fire, which prevents trees from establishing, differentiates high and low tree cover, especially in areas with rainfall between 1000 mm and 2000 mm. Fire is less important at low rainfall (<1000 mm), where rainfall limits tree cover, and at high rainfall (>2000 mm), where fire is rare. This pattern suggests that complex interactions between climate and disturbance produce emergent alternative states in tree cover. The relationship between tree cover and fire was incorporated into a dynamic model including grass, savanna tree saplings, and savanna trees. Only recruitment from sapling to adult tree varied depending on the amount of grass in the system. Based on our empirical analysis and previous work, fires spread only at tree cover of 40% or less, producing a sigmoidal fire probability distribution as a function of grass cover and therefore a sigmoidal sapling to tree recruitment function. This model demonstrates that, given relatively conservative and empirically supported assumptions about the establishment of trees in savannas, alternative stable states for the same set of environmental conditions (i.e., model parameters) are possible via a fire feedback mechanism. Integrating alternative stable state dynamics into models of biome distributions could improve our ability to predict changes in biome distributions and in carbon storage under climate and global change scenarios.