An Investment Model of Depressive Resistance

A functional utility model of depressive resistance is advanced, drawing upon modern portfolio theory of how individuals decide to allocate resources. According to this microeconomic model, depressed individuals believe they have few present and future resources and low utility of gain in a market that is volatile and downward sloping. Depression is viewed as a strategy to avoid further loss, resulting in active attempts to resist change as evidenced in motivated negative cognition. Depressives take a risk-averse strategy to minimize loss, utilizing high stop-loss criteria and rejecting optimism as a high exposure position. Unlike optimistic individuals who believe that there are many replications over a long duration to obtain gain, depressives have low diversification, high information demands, and utilize hedging, waiting, hiding and other tactics to minimize risk.