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I am struggling to think why horizontal gene transfer between bacteria would have persisted during the course of evolution as surely it puts the 'donor' at a disadvantage?

For example, consider a hypothetical situation where only one species of bacteria has a gene to resist a new (almost) omnipotent antibiotic. When growing on this medium, this species of bacteria has nil inter-specific competition for the resources it needs. Yet if it passes on the plasmid containing the resistance gene via conjugation to individuals of a different bacterial species, they then too are able to grow on the medium and potentially out-compete the first species - thus the conjugation could possibly be extremely detrimental to the survival of the original population.

I'm obviously missing something as the feature has persisted, so what is the advantage to the donor species of conjugation?

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The donor bacterium, viewed as a unit, may well gain no advantage from sharing its genes. The genes that are shared, however, may gain a very substantial reproductive advantage from being able to spread to other strains. If some of the genes that are capable of being shared also promote sharing, they may be selected for by evolution.

This is a good example of the basic principle of the gene-centered view of evolution, famously popularized by Richard Dawkins is his book The Selfish Gene: evolution selects for genes that are good at spreading themselves. This may, but need not always, imply helping the organism containing the gene to survive and reproduce.

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Excellent point. I'm working with a collaborator that specializes in social insects. One of the things I remember her discussing is that when the level of cooperation in a colony reaches a certain level, evolutionary forces begin acting on the colony rather than (or in addition to?) the individuals within the colony. So although we often think of evolution in terms of populations of organisms, there are cases when it makes sense to look at it in terms of populations of genes or populations of colonies, etc. –  Daniel Standage Apr 21 '12 at 16:06
    
This is also a good example why the “selfish gene” view does provide new insight, contrary what is often claimed by detractors. Without such an explanatory framework, LGT would indeed be much harder to explain (parasitism might work, but would probably result in some sort of evolutionary arms race which we would expect to observe). –  Konrad Rudolph Apr 21 '12 at 21:36
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