Social-selection theory envisions that animals frequently work in teams, meaning they take coordinated actions in pursuit of a team goal. When a team goal is attained, the team reward must be divided so that members don't withdraw and so that team members honestly communicate their knowledge to other members of the team. Economic analysis in management science has investigated incentive structures that cause employees in a firm to act in ways that maximize the firm's production. (1) Can incentive analysis from management science be adapted to behavioral ecology? (2) Can incentive analysis predict parental investment in offspring?

Results/Conclusions

A theorem of Groves (1973) exhibits optimal compensation rules for an organization called a conglomerate. The application of Groves theorem to parental investment is developed, in which the “biological conglomerate” consists of a bird's nest where the parent is the “manager” and the chicks are the “divisions.” The optimal compensation rules amount to a mechanism whereby the parent “auctions” its food to the nestlings, and the nestlings indicate the price they are paying for their food by the extent of their begging behavior. The chicks signal to the parent how much demand they have for food at each price and the parent then sets the price so that all the food is consumed. This process causes the optimal stratergies for the each of the chicks to coincide with the optimal strategy of the parent, and thereby maximizes the fitness yield from the nest as a whole.

This new theory of parental investment contrasts with conventional theories that predict universal and inevitable parent-offspring conflict. Instead, if the parent implements optimal compensation policies, the parent and chicks work together as a team to maximize the fitness produced by the nest.