Portfolio theory and how parent birds manage investment risk

Abstract

Investment theory is founded on the premise that higher returns are generally associated with greater risk, and that portfolio diversification reduces risk. Here I examine parental investment decisions in birds from this perspective, using data from a model system, a 16‐year study of breeding red‐winged blackbirds Agelaius phoeniceus. Like many altricial birds, blackbirds structure their brood into core (first‐hatched) and marginal (later‐hatched) elements that differ in risk profile. I measured risk in two ways: as the coefficient of variation in growth and survival of core and marginal offspring from a given brood structure; and using financial beta derived from the capital asset pricing model of modern portfolio theory. Financial beta correlates changes in asset value with changes in the value of a broader market, defined here as individual reproductive success vs. population reproductive success. Both measures of risk increased with larger core (but not marginal) brood size; and variation in growth and survival was significantly greater during ecologically adverse conditions. Core offspring showed low beta values relative to marginal progeny. The most common brood structures in the population exhibited the highest beta values for both core and marginal offspring: many parent blackbirds embraced rather than avoided risk. But they did so prudently with an investment strategy that resembled a financial instrument, the call option. A call option is a contingent claim on the future value of the asset, and is exercised only if asset value increases beyond a point fixed in advance. Otherwise the option lapses and the investor loses only the initial option price. Parents created high risk marginal progeny that were forfeited during ecological adversity (the option lapses) but raised otherwise (the option called); at the same time parents maintained a constant investment and return in low risk core progeny that varied little with changes in brood size or ecological conditions.

Egg size and asymmetric sibling rivalry in red-winged blackbirds

“…Where nestling mass exceeded 92% of egg mass (the average mass of a hatchling relative to initial egg mass) by more than half the average difference of nestling growth between 1-and 2-day-old nestlings (1.9 g), a nestling was considered to have hatched the previous day and assigned core or marginal status accordingly. Core brood size ranged from one to four; marginal brood size ranged from zero to four, and overall brood size ranged from one to six (Forbes 2009). Partial brood loss was frequent particularly in larger broods and was associated with retarded growth of marginal progeny, and only rarely affected core progeny (Forbes et al 1997(Forbes et al , 2001Forbes 2009).…”

“…Core brood size ranged from one to four; marginal brood size ranged from zero to four, and overall brood size ranged from one to six (Forbes 2009). Partial brood loss was frequent particularly in larger broods and was associated with retarded growth of marginal progeny, and only rarely affected core progeny (Forbes et al 1997(Forbes et al , 2001Forbes 2009). We believe that nearly all partial brood loss arose as a by-product of fatal sibling rivalry.…”

“…It is quite possible that parents with different family structures are adopting different brood-rearing strategies (see Forbes 2009). To unravel these associations and to assess the significance of within-clutch variation in egg size more thoroughly will require close scrutiny that is beyond the scope of the work presented here.…”

“…Given our large data set we prefer this approach to using a nested analysis (nesting individuals within broods for the purpose of analysis) given that nest identity is often confounded with variables of interest such as initial brood size. To assess the effects of ecological variability on the relationship between egg and nestling mass, we divided the 17-year data set into years of above (1994-1996, 1998, 2001, 2004-2006, 2008) and below average (1993, 1997, 1999, 2000, 2002-2003, 2007, 2009) reproductive success based upon the mean number of nestlings reaching 8 days of age in a given year (see Forbes 2009 for further details) and included year-type (above or below average) as a dummy variable in the regression analysis. We examined within-season effects by examining the effect of hatching date within the analysis (1 June = 0) to determine if, for example, nestlings hatched later in the season were smaller for a given egg size.…”

“…But a series of other decisions are superimposed upon this: how many eggs to make (Monaghan and Nager 1997); whether to fortify individual eggs with maternally derived hormones (Schwabl 1996) or immune system complements (Royle et al 2001;Bortolotti et al 2003); when to commence incubation (Clark and Wilson 1981). As in many songbirds, red-winged blackbirds (Agelaius phoeniceus) impose maternal handicaps upon their nestlings-e.g., by asynchronous hatching (Forbes et al 1997(Forbes et al , 2001Forbes 2009); differences in egg size (Reed et al 1999); hormonal titre (Lipar et al 1999); and immune system complement (Hall et al 2010)-that render some offspring more equal than others. The presence of such handicaps structures the sibship into castes of advantaged ''core'' offspring and disadvantaged ''marginal'' offspring (Mock and Forbes 1995;Forbes et al 1997;Mock and Parker 1997;Forbes and Glassey 2000;Hall et al 2010).…”