Productivity effects of innovation, stress and social relations

Rifka Weehuizen, Bulat Sanditov and Robin Cowan

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: Innovation 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.

Date: 2008
New Economics Papers: this item is included in nep-hap and nep-soc
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Related works:
Journal Article: Productivity effects of innovation, stress and social relations (2011)
Working Paper: Productivity effects of innovation, stress and social relations (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2008-07

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