Productivity effects of innovation, stress and social relations
AbstractInnovation is a source of increasing productivity, but it is also a source of stress. Psychological research shows that moderate stress increases the productivity of an actor, but above a certain level, additional stress decreases productivity. Stress is reduced by coping behaviour of the actor, and in addition it is buffered by social relations. However, high levels of stress negatively affect social relations, causing social erosion. In a formal model including inter-agent dynamics, we show that the variables moderating stress levels are of crucial importance for identi- fying the overall effects of different rates of innovation on productivity. The model shows among other things that the existence and nature of relationships of people determine the extent to which a certain rate of innovation effectively results in increasing productivity. In addition, it shows the possibility of multiple equilibria - under some parameter values both high- and low-stress steady states exist; and the dynamics exhibit hysteresis. At very high levels of stress, innovation can result in a dissolution of social relations, and has a negative relationship with the rate of economic growth.
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Bibliographic InfoPaper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2008-07.
Date of creation: 2008
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Other versions of this item:
- Cowan, Robin & Sanditov, Bulat & Weehuizen, Rifka, 2011. "Productivity effects of innovation, stress and social relations," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 165-182, August.
- Weehuizen, Rifka & Sanditov, Bulat & Cowan, Robin, 2008. "Productivity effects of innovation, stress and social relations," MERIT Working Papers 015, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-HAP-2008-04-29 (Economics of Happiness)
- NEP-SOC-2008-04-29 (Social Norms & Social Capital)
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