Recreating the South Sea bubble: Lessons from an experiment in financial history

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods of asset overvaluation in history: an intricate debt-for-equity swap, deferred payment for these shares, and the possibility of default on the deferred payments. We consider which aspect might have had the most impact in creating the South Sea bubble. The results of the experiment suggest that the company?s attempt to exchange its shares for government debt was the single biggest contributor to the stock price explosion, because of the manner in which the swap affected fundamental value. Issuing new shares with only partial payments required, in conjunction with the debt-equity swap, also had a significant effect on the size of the bubble. Limited contract enforcement, on the other hand, does not appear to have contributed significantly.

A morphological reappraisal of the immature stages and life history of Elachista synethes Meyrick (Lepidoptera, Elachistidae), an Australian leaf miner alien to Chile

ABSTRACT Elachista synethes was recently recognized as an alien species in northern Chile, where its larvae mine the rescue grass Bromus catharticus (Poaceae). In order to provide the necessary information to allow field detection of E. synethes during early ontogeny, we conducted a morphological reappraisal of the immature stages of this leaf-miner moth, based on light and scanning electron microscopy, including the first descriptions of the egg and the first-instar larva. This is the first report of the existence of an apodal early larva for a species of Elachista Treitschke. The legs and prolegs are absent in the first two instars, but are well developed in the last two. Additional observations on the life history are also provided, including a description of the mine.

Genetic and environmental effects on the covariation betweencolour polymorphism and a life history trait

Variation in coloration with a strong underlying genetic basis is frequently found within animal populations but little is known about its function. Covariation between colour polymorphism and life-history traits can arise because morphs perform differently among environments or because they possess alternative alleles coding for key life-history traits. To test these two hypotheses, we studied a population of tawny owls Strix aluco, a bird displaying red, brown and grey morphs. We assessed the colour morph of breeding females, swapped eggs or hatchlings between pairs of nests, and examined how body condition in 3-week-old nestlings covaries with coloration of foster and genetic mothers. Redder foster and genetic mothers produced young in better condition. Because in two other years we observed that greyish females produced offspring in better condition than those of red females, the present study suggests that colour polymorphism signals genetic and phenotypic adaptations to cope with a fluctuating environment.

Mitochondrial uncoupling as a regulator of life-history trajectories in birds: an experimental study in the zebra finch.

Mitochondria have a fundamental role in the transduction of energy from food into ATP. The coupling between food oxidation and ATP production is never perfect, but may nevertheless be of evolutionary significance. The 'uncoupling to survive' hypothesis suggests that 'mild' mitochondrial uncoupling evolved as a protective mechanism against the excessive production of damaging reactive oxygen species (ROS). Because resource allocation and ROS production are thought to shape animal life histories, alternative life-history trajectories might be driven by individual variation in the degree of mitochondrial uncoupling. We tested this hypothesis in a small bird species, the zebra finch (Taeniopygia guttata), by treating adults with the artificial mitochondrial uncoupler 2,4-dinitrophenol (DNP) over a 32-month period. In agreement with our expectations, the uncoupling treatment increased metabolic rate. However, we found no evidence that treated birds enjoyed lower oxidative stress levels or greater survival rates, in contrast to previous results in other taxa. In vitro experiments revealed lower sensitivity of ROS production to DNP in mitochondria isolated from skeletal muscles of zebra finch than mouse. In addition, we found significant reductions in the number of eggs laid and in the inflammatory immune response in treated birds. Altogether, our data suggest that the 'uncoupling to survive' hypothesis may not be applicable for zebra finches, presumably because of lower effects of mitochondrial uncoupling on mitochondrial ROS production in birds than in mammals. Nevertheless, mitochondrial uncoupling appeared to be a potential life-history regulator of traits such as fecundity and immunity at adulthood, even with food supplied ad libitum.