A Model of Casino Gambling

We show that prospect theory offers a rich theory of casino gambling, one that captures several features of actual gambling behavior. First, we demonstrate that, for a wide range of preference parameter values, a prospect theory agent would be willing to gamble in a casino even if the casino only offers bets with no skewness and with zero or negative expected value. Second, we show that the probability weighting embedded in prospect theory leads to a plausible time inconsistency: at the moment he enters a casino, the agent plans to follow one particular gambling strategy; but after he starts playing, he wants to switch to a different strategy. The model therefore predicts heterogeneity in gambling behavior: how a gambler behaves depends on whether he is aware of the time inconsistency; and, if he is aware of it, on whether he can commit in advance to his initial plan of action.

Realization Utility

A number of authors have suggested that investors derive utility from realizing gains and losses on assets that they own. We present a model of this “realization utility,” analyze its predictions, and show that it can shed light on a number of puzzling facts. These include the disposition effect, the poor trading performance of individual investors, the higher volume of trade in rising markets, the effect of historical highs on the propensity to sell, the individual investor preference for volatile stocks, the low average return of volatile stocks, and the heavy trading associated with highly valued assets.

Extreme Rainfall Events Alter the Trophic Structure in Bromeliad Tanks Across the Neotropics

Changes in global and regional precipitation regimes are among the most pervasive components of climate change. Intensification of rainfall cycles, ranging from frequent downpours to severe droughts, could cause widespread, but largely unknown, alterations to trophic structure and ecosystem function. We conducted multi-site coordinated experiments to show how variation in the quantity and evenness of rainfall modulates trophic structure in 210 natural freshwater microcosms (tank bromeliads) across Central and South America (18°N to 29°S). The biomass of smaller organisms (detritivores) was higher under more stable hydrological conditions. Conversely, the biomass of predators was highest when rainfall was uneven, resulting in top-heavy biomass pyramids. These results illustrate how extremes of precipitation, resulting in localized droughts or flooding, can erode the base of freshwater food webs, with negative implications for the stability of trophic dynamics

Ecological Response to Altered Rainfall Differs Across the Neotropics

There is growing recognition that ecosystems may be more impacted by infrequent extreme climatic events than by changes in mean climatic conditions. This has led to calls for experiments that explore the sensitivity of ecosystems over broad ranges of climatic parameter space. However, because such response surface experiments have so far been limited in geographic and biological scope, it is not clear if differences between studies reflect geographic location or the ecosystem component considered. In this study, we manipulated rainfall entering tank bromeliads in seven sites across the Neotropics, and characterized the response of the aquatic ecosystem in terms of invertebrate functional composition, biological stocks (total invertebrate biomass, bacterial density) and ecosystem fluxes (decomposition, carbon, nitrogen). Of these response types, invertebrate functional composition was the most sensitive, even though, in some sites, the species pool had a high proportion of drought‐tolerant families. Total invertebrate biomass was universally insensitive to rainfall change because of statistical averaging of divergent responses between functional groups. The response of invertebrate functional composition to rain differed between geographical locations because (1) the effect of rainfall on bromeliad hydrology differed between sites, and invertebrates directly experience hydrology not rainfall and (2) the taxonomic composition of some functional groups differed between sites, and families differed in their response to bromeliad hydrology. These findings suggest that it will be difficult to establish thresholds of “safe ecosystem functioning” when ecosystem components differ in their sensitivity to climatic variables, and such thresholds may not be broadly applicable over geographic space. In particular, ecological forecast horizons for climate change may be spatially restricted in systems where habitat properties mediate climatic impacts, and those, like the tropics, with high spatial turnover in species composition

Species niches, not traits, determine abundance and occupancy patterns: A multi‐site synthesis

International audienceAim: Locally abundant species are usually widespread, and this pattern has been related to properties of the niches and traits of species. However, such explanations fail to account for the potential of traits to determine species niches and often overlook statistical artefacts. Here, we examine how trait distinctiveness determines the abilities of species to exploit either common habitats (niche position) or a range of habitats (niche breadth) and how niche position and breadth, in turn, affect abundance and occupancy. We also examine how statistical artefacts moderate these relationships. Location: Sixteen sites in the Neotropics. Time period 1993–2014. Major taxa studied Aquatic invertebrates from tank bromeliads. Methods: We measured the environmental niche position and breadth of each species and calculated its trait distinctiveness as the average trait difference from all other species at each site. Then, we used a combination of structural equation models and a meta-analytical approach to test trait–niche relationships and a null model to control for statistical artefacts. Results: The trait distinctiveness of each species was unrelated to its niche properties, abundance and occupancy. In contrast, niche position was the main predictor of abundance and occupancy; species that used the most common environmental conditions found across bromeliads were locally abundant and widespread. Contributions of niche breadth to such patterns were attributable to statistical artefacts, indicating that effects of niche breadth might have been overestimated in previous studies. Main conclusions: Our study reveals the generality of niche position in explaining one of the most common ecological patterns. The robustness of this result is underscored by the geographical extent of our study and our control of statistical artefacts. We call for a similar examination across other systems, which is an essential task to understand the drivers of commonness across the tree of life