  At the end of the first larval stage, the C elegans larva chooses between two
developmental pathways, an L2 committed to reproductive development and an L2d,
which has the option of undergoing reproductive development or entering the
dauer diapause. I develop a quantitative model of this choice using
mathematical tools developed for pricing financial options. The model predicts
that the optimal decision must take into account not only the expected
potential for reproductive growth, but also the uncertainty in that expected
potential. Because the L2d has more flexibility than the L2, it is favored in
unpredictable environments. I estimate that the ability to take uncertainty
into account may increase reproductive value by as much as 5%, and discuss
possible experimental tests for this ability.
