Stress and Communication: An Economic Approach · Stress and Communication-An Economic Approach Klaus Wälde Gutenberg University Mainz and CESifo, Louvain-la-Neuve, Bristol October

Stress and Communication: An Economic Approach

Klaus Wälde

Stress and Communication-

An Economic Approach

Klaus Wälde

Gutenberg University Mainzand CESifo, Louvain-la-Neuve, Bristol

October 2013

Klaus Wälde (Gutenberg University Mainz and CESifo, Louvain-la-Neuve, Bristol)Stress and Communication October 2013 1 / 58

1. Introduction

Stress is known by everybody

At times, there are just too many demands and too little timeWork and wife, professional and private life, sometimes just too much

Stress has been a (disturbingly) popular concept ever since it wasintroduced in 1936 by Selye

“Nowadays, everyone seems to be talking about stress” (Selye, 1982)“It is virtually impossible today to read extensively in any of thebiological or social sciences without running into the term stress”(Lazarus and Folkman, 1984)Up to today, stress is a topic gaining more and more academic attentionBeyond research, there are stress reports (e.g. “Stressbericht 2012”byBundesanstalt für Arbeitsschutz und Arbeitsmedizin), lot of talk aboutburnout syndrome, the rise of psychological diseases in overall diseasesand the like ...


1. Introduction

The open issue

Why do economists not work on stress?

Economic world hosts a large group of stress-inducers

(Biased) Technological changeGlobalisationUnemploymentFinancial and Euro crisis... are all “good” sources of stress

A conceptual framework is missing for economic model building

We need to bring more psychology into economics (Rabin, 2013)


1. Introduction

The objectives

Provide a conceptual framework that allows to understandstressors —appraisal — stress —coping

Stressors: Anything that can be perceived as leading to stressAppraisal: Process of evaluating a stressor concernings its implicationfor well-being of a personStress: Subjective feeling resulting from current and past appraisals ofstressorsCoping: Behaviour aimed at reducing stress

Apply this framework to stress and communication


1. Introduction

Questions on communication

How does stress translate into more or less aggressive communicationpatterns?

If communication can be smooth or take the form of “emotionaloutbursts”, how frequent are those?

Should emotional outbursts be avoided or supressed?

Questions on stress

How well does communication help in regulating stress?

What is the role of personality in stress regulation?

Is the level of stress optimal when communication is chosen optimally?

What can we learn about emotion and emotion regulation moregenerally?


1. Introduction

Related literature

Economic literature

Theories of emotionsOptimal stopping problemsStress in empirical workThe importance of communication in firms

Psychological literature

The importance of communication in couplesStress and emotion regulation... more to come during the talk ...

skip literature


1. IntroductionHow important are patterns of communication?

Professional communicationPreassure for productivity ... leads to an increase in aggressiveworkplace behaviour (Baron and Neuman, 1996)Verbal aggression is even more common (experienced by 1/3 ofworkers, Bjorkqvist et al, 1994)Is verbal aggression the percursor of more violant aggression atworkplace? (Andersson and Pearson, 1999)

Communication of couplesMore aggression in times of stress (Bodenmann et al, 2012, Williams etal, 2013)USA: 75% of couples report verbal aggression and 10% reportedphysical aggression (Stets, 1990, USA, random digit dialing)Germany: 44% (women) to 52% (men) report “having arguments orconflicts” (SOEP with weighting factors)conflict is with partner (45%), parents (14%), children (13%), sibblings(7%), hardly with colleagues or outside family

Communication style highly important for subjective well-beingKlaus Wälde (Gutenberg University Mainz and CESifo, Louvain-la-Neuve, Bristol)Stress and Communication October 2013 7 / 58

1. Introduction

Related literature —Emotions in economics

emotion (theory) paperdesire Laibson (2001)

desire/ compulsion Bernheim and Rangel (2004), Ameriks, Caplin, Leahy and Tyler (2007)

Brocas and Carrillo (2008)

compulsion Loewenstein et al. (2003)

hunger, thirst, pain, desire Loewenstein (2000)

self-confidence Compte and Postlewaite (2004)

guilt-from-blame Battigalli and Dufwenberg (2007), Charness and Dufwenberg (2011)

fear/ joy Caplin and Leahy (2001, 2004), Köszegi (2006)

regret Loomes and Sugden (1982, 1986)

disappointment aversion Gul (1991), Grant, Kajii and Polak (2001)

disappointment/ elation Bell (1985)


1. Introduction

Literature on optimal stopping problems

Brownian motion: Bentolila and Bertola (1990), Bertola andCaballero (1994), Dixit (1989)

textbook: Stokey (2008)

Poisson uncertainty: Dixit and Pindyck (1994 ch 5.B), Ahlin andShintani (2007), Chen and Funke (2005)

Stress in the empirical economic literature

Birth weight (Camacho, 2008)

Parental stress and child outcomes (Baker Gruber Milligan, 2008)

Housing vouchers on mental health (Kling, Liebman and Katz 2007)

Gender differences in abilities to cope with stress (Kling, Ludwig andKatz 2005)

No theoretical economic analysis of stress or stress and communication


1. Introduction

Stress in the psychological literature

Lazarus (1966) Psychological Stress and the Coping Process

Lazarus and Folkman (1984) Stress, Appraisal and Coping

Lazarus (1999) Stress and emotion: A new synthesis

Lazarus (2006) ... Emotions and Coping

Gross (1998) The Emerging Field of Emotion Regulation: AnIntegrative Review

Gross (2008) Emotion regulation

much more — see talk


1. Introduction

Structure of the talk

2. Stress, personality and communication (the model)3. Optimal communication4. Stress and communication patterns→ Theory consistent personality types→ The outburst theorem→ Is surpressing outbursts a good idea?→ Temporary stressors and permanent stress?→ Are stress levels optimal?

5. Conclusion


2. Stress, personality and communication2.1 The origins of stress

Stress is usually understood to result from

stressors and

an appraisal process (evaluation of stressors)

Many events can be understood as stressors

... some of which occur rarely, some occur daily

Social Readjustment Rating Scale (Holmes and Rahe, 1967) captureslife-time to rare events like ’death of spouse’, ’divorce’, ’jail term’,’fired at work’... ’vacation, ’christmas’and ’minor violations of law’

Daily hassles and uplifts (Kanner, Coyne, Schaefer and Lazarus, 1981)captures everyday life like ’losing things’, ’don’t like fellow workers,’too many obligations’...



Modelling rare events

Rare events imply positive or negative surprises g (t)(Bell, 1985, Loomes and Sugden, 1982, 1986)

g (t) = h (t)− µ

h (t) is a random variable, µ is subjective expectation

Example for h (t): Divorce, fired at work, new job ... but also: newuniversity policies, paper got accepted (or not) ...

Rare events occur at random points in time (following a Poissonprocess q (t) with arrival rate λ)



Modelling daily hazzles and uplifts

Flow of events paired with abilities of individual

Example

→ demand by colleagues, students oruniversity administration — implies pressure p (t)

→ individual abilities a (t) to cope with pressure



Modelling the appraisal process

“... an appraisal is an evaluation of a situation in terms of itsrelevance for oneself, specifically one’s goals or well-being (e.g.,Lazarus 1968)”

“... it is the means by which we extract meaning from events (e.g.,Frijda 1993b)”

“... appraisal as a temporal and causal antecedent to emotion(Scherer 1993b; 1999; Roseman and Smith 2001)” (all from Lewis,2005)

a known function f( pa , .)where f (.) is specific to individual





Formal modelling

Emotional tension W (t) is a state variable described by a stochasticdifferential equation

dW (t) ={f(pa,W (t)

)− δ (m (t) ,W (t))

}dt

+G (g (t) ,W (t)) dq (t)

Deterministic part displays

stressors p and ability a, both are exogenous and fixedf (.) as appraisal of stressor given current stress level... more (to be discussed shortly)

Stochastic part displays

surprises g (t) , exogenous and random in levelappraisal of surprises captured by G (.)Poisson process q (t) with exogenous arrival rate


2. Stress, personality and communication2.2 The impact on the individual

Emotional tension and stress can have positive effects

Tension is a feeling that guides attentionTension goes from boredom via flow to stress (Nakamura andCsikszentmihalyi, 2001)There is (negative) distress and (positive) eustress (Selye, 1976)Here: Positive role(s) of stress are left in the background

Stress usually evokes negative associations

Stress symptoms like headache, dizziness, sweating, sleeplessness ...Implications for emotions, behaviour, nervous or cardiovascularsystem ...

How to model emotional tension and well-being?

Direct channel affects well-being (utility) directlyIndirect channel affects utility via labour income of the individualBoth channels affect instantaneous utility u (c (t) ,W (t))



The indirect channel of cognitive load

Stress is the result of appraisal of stressors, which can be “costless”or resource consuming

Reflections on how to react to stressors is resource consuming(“high-level appraisals”, e.g. Kalisch et al., 2006)

Both processes lead to “cognitive load” (Sweller, 1988, Eysenck andCalvo, 1992, Hoffman, von Helversen and Rieskamp, 2013)

Cognitive load stands for all the thoughts and worries, constructive ornot, related to stressors and strategies on how to best react tostressors



Modelling cognitive load by a mental resource constraint

An individual is endowed with a certain amount of working memoryM (see Smith and Kossly, 2007, esp. ch. 6 as a starting point)

Stressors and coping use up resources of the working memory

Higher stress levels imply cognitive load and leave less workingmemory for other purposes (bounded rationality?)

Memory/ resource constraint in the case of “stress” and “effort”

M (W ) +M (e) = M

If effective labour input rises in effort, consumption falls in stress,c = wl (e)


2. Stress, personality and communication2.3 Strategies for coping with tension

Huge variety of coping strategies

Coping seems so heterogeneous that psychologists even disagree onhow to classify strategies (Skinner et al. 2003)Frequent strategies: problem solving, support seeking, ... , emotionalexpression, aggression, ... , wishful thinking, worryCategories: functional vs dysfunctional approaches, problem-focusedvs emotion-focused (Lazarus and Folkman, 1984)

We model emotion-focus and functional vs dysfunctional (in some sense)category

“controlled”approachtalking to a friend, a relative, a therapist

“uncontrolled”approach —emotional outburstsindividuals feel overwhelmed by stressorsemotional tension rises to much, they “can’t help”but explodeindividuals start crying, shout at others, call other people names



How do we capture coping strategies in the model?

Controlled approach described by communication m (t) —Talkingreduces tension by

“sorting things out”by explaining to oneself or another where tension comes fromby rationalizing events

Stress is reduced through depreciation function δ (.) where∂δ (m (t) , .) /∂m (t) > 0Reduction of tension by smooth and calm communications is agradual, slow processSecond strategy is emotional outburstRelatively short, captured by the speed of tension reduction —outburst reduces tension by a fixed amount ∆

W (τi ) = W (τi−)− ∆



Second strategy is emotional outburstRelatively short, captured by the speed of tension reduction —outburst reduces tension by a fixed amount ∆

W (τi ) = W (τi−)− ∆

There is empirical support for this “stress-reduction technology”Klaus Wälde (Gutenberg University Mainz and CESifo, Louvain-la-Neuve, Bristol)Stress and Communication October 2013 23 / 58


Any empirical support for oubursts as “stress-reduction technology”?

Evidence is scarce: “research on the consequences that followperpetrating psychological aggression is nonexistent” (Shorey at al.,2012)

Self-reports of female college students range from “felt less angry”(42.6%) and "felt less stressed" (25.7%) to “felt more angry”(41.7%) to “felt more stressed” (40.2%)

Clear effect on reduction of stressor: “partner stopped doingsomething that upset you”or “partner showed that he or she caredfor you more”

On average (percentages times level of change) individuals clearlyreduced stress or anger



More empirical support for oubursts as “stress-reduction technology”

Metaphors that suggest so: “let it out”, “do not bottle your anger upinside“, “air-cleaning”conflicts (Bushman, Baumeister and Phillips,2001)

Experiments show that people reacted more aggresively when theybelieve that outbursts reduce their anger (people who believe thatstress reduces from W (τi−) to W (τi ) choose a larger ∆)Specification of effect of outburst on stress

W (τi ) = W (τi−)− ∆

seems psychologically sound



Formal modelling

Emotional tension W (t) is a state variable

dW (t) ={f(pa,W (t)

)− δ (m (t) ,W (t))

}dt

+G (g (t) ,W (t)) dq (t)

Deterministic part displays

... known terms (stressor relative to ability p/a, appraisal f (.)) pluscommunication m (t) that leads tosmooth reduction of tension captured by “depreciation function” δ (.)

Stochastic part displays

known terms (surprise g (t) , appraisal G (.) ...)

We add “outburst technology” to reduce tension

W (t) = W (t−)− ∆




3. Optimal communication3.1 The maximization problem

How does individual behave optimally?

How does s/he choose smooth communication m (t)?How does s/he choose (does s/he?) outbursts?

Costs of communication

Cost of smooth communication v (m (t)) , m (t) is chosen optimally

Cost of emotional outbursts vM ≡∫ s+Λs e−ρ[τ−s ]v (m (τ)) dτ

Outbursts occur when tolerance level W is hit (behavioural,exogenous, automatic ...)

Formal structure

Optimal stopping problem with exogenous stopping

Et∫ ∞

te−ρ[τ−t ] [u (c (τ) ,W (τ))− v (m (τ))] dτ − Σni=1e

−ρ[τi−t ]vM

Choosing a path {m (τ)}∞t anticipating outbursts at W and taking

constraints on W (t) into account


3. Optimal communication3.2 Optimal communication choice

Properties of the closed-form solution

Optimal communication level

m =(

δ1v0

vM

∆1

1+ ζ

)1/ζ

Assume convex cost function v (m) for communication, i.e. ζ > 0

Amount of talking

increases in δ1 —reflecting productivity of smooth communicationdecreases in v0 —relecting costs of smooth communicationincreases in vM —reflecting costs of emotional ouburstdecreases in ∆ —reflecting productivity of emotional outburst

Amount of talking is independent of current tension level W (t)


4. Stress and communication patterns4.1 Dynamics of stress and communication

A world without surprises

Deterministic frameworkOrdinary differential equation for stress W (t)

W (t) =(

φpa− δ0

)W (t)− δ1m

Parametersp > 0 stressor (relative to ability a)φ ≥ 0 appraisal parameterδ0 ≥ 0 autonomous stress-reduction potentialδ1 > 0 productivity parameter for active copingm optimal smooth communication level

Steady state level of stress

W ∗ =δ1m

φ pa − δ0

Steady state level can be positive or negativeA positive steady state level is better called a threshold level



A phase diagram illustration

W (t) =(

φpa− δ0

)W (t)− δ1m



A world with surprises

Stochastic frameworkStochastic differential equation for stress W (t)

dW (t) ={(

φpa− δ0

)W (t)− δ1m

}dt − χ [h (t)− µ] dq (t)

Known parametersp stressor (relative to ability a)φ ≥ 0 appraisal parameterδ0 ≥ 0 autonomous stress-reduction potentialδ1 > 0 productivity parameter for active copingm optimal smooth communication level

New parametersh (t) is a random variable (rare event, anouncement of new researchgrant policies by university)µ is subjective expectationχ ≥ 0 appraisal parameterarrival rate λ for Poisson process q (t) describing frequence of surprises



A phase diagram illustration for the case with surprises

dW (t) ={(

φpa− δ0

)W (t)− δ1m

}dt − χ [h (t)− µ] dq (t)


4. Stress and communication patterns4.2 Theory consistent personality types

Definition (stress-prone and stress-resistant)

An individual that{might convergealways converges

}to a stress level{

implyingnot implying

}outbursts is called

{stress-pronestress-resistant

}

Definition (good stabilizer and bad stabilizer)

An individual (in a given situation) whose stress level is{not convergingconverging

}to an outburst is is called a{

goodbad

}stabilizer


4. Stress and communication patterns4.2 Theory consistent personality types

A phase diagram illustration for stress-prone and stress-resistant individuals


4. Stress and communication patterns4.3 The outburst theorem

Questions

Which communication channels will be chosen?

“one intriguing puzzle is why people use one emotion regulationstrategy rather than another” (Gross, 2008, p. 505)

Would outbursts ever occur in a world without surprises —and in apredictable way?

Or would the individual exclusively employ the smoothcommunication channel to reduce tension?



Findings

Personality is central and can make individual stress-resistant

“relaxed”appraisal of situation (p/a), captured by φ, helpsHigh autonomous stress-reduction potential δ0 helps as well

Communication can make stress-prone individual a good stabilizer

Communication can not prevent outbursts for stress-prone individual

Even in a deterministic predictable world, outbursts are a technologyfor “functional emotion-focused coping”

Determinants of emotional outbursts

Theorem (Outburst theorem) An individual is a bad stabilizer if and only if(i) the growth rate of stress is positive, Φ > 0, and either(iia) the threshold level W ∗ is negative, W ∗ < 0, or(iib) the threshold level W ∗ is positive, W ∗ > 0, and the current stresslevel W (t) is larger than W ∗



Illustrating the outburst theorem




Outbursts occur ...

... for given demands φp/a if autonomous stress-reduction potentialδ0 is too low

... for a given autonomous stress-reduction potential δ0 at suffi cientlyhigh demands p




Outbursts do not occur ...

... if abilities are suffi ciently high (problem-focused coping) for agiven δ0 (and φ and p)

Talking smoothly ...

... helps to reduce the risk of outbursts for a given (φp/a, δ0)

.... but can not eliminate them irrespective of the level of talking


4. Stress and communication patterns4.4 Should outbursts be suppressed?

Should one increase the tolerance level W ?The setup

What happens when W rises?sounds good: outburst at least comes laterbut what about: “let it out”, “do not bottle your anger up inside“,“air-cleaning quarrels” (Bushman, Baumeister and Phillips, 2001)


4. Stress and communication patterns4.4 Should outbursts be suppressed?

Should one increase the tolerance level W ?

It might actually not be such a good idea!

While higher outburst level W postpones next outburst ...

... higher W might also make the permanent stress-reduction effectobsolete

The individual might be caught in an outburst cycle


4. Stress and communication patterns4.5 The frequency of outbursts

How often do outbursts occur?

We consider a bad stabilizer


4. Stress and communication patterns4.5 The frequency of outbursts

How often do outbursts occur?

stress level change exponentially in time τ

W (τ) = (W (t)−W ∗) eΦ[τ−t ] +W ∗

growth rate of stress is Φ ≡ φ pa − δ0 (measures also (in)stability ofan individual)

The frequency of outbursts is T−1 = Φ/ ln W−W ∗

W−∆−W ∗

How can outburst cycles be interrupted?

W (t) is current stress level

W ∗ is threshold stress level

An increase in smooth communication increases the threshold levelW ∗. This increases the chance that an outburst pushes the individualbelow the threshold level W ∗


4. Stress and communication patterns4.6 Temporary stressors and permanent stress?

Reminder of the case without surprises



Reminder of the case with surprises



How important are positive or negative surprises?

Are the effects transitory or permanent?

Imagine a big clash in the department, can this have permanenteffects?

Imagine a big team building effort in a firm, can this have permanenteffets?

Does this effort help to relieve symptoms or heal cause?

We can understand all this by returning to distinction between stress-proneand stress-resistant individual



The evolution of stress after negative surprises for a stress-prone and astress-resistant individual

0 20 40 60 80 1000

1

2

3

4

5

time

Ev olution of stress under surprises

stresspronestressresistant

Identical sequence of shocks pushes

stress-prone individual to outburst whilestress-resistant individual stays calm (remains a good stabilizer)



The evolution of stress after negative surprises for a stress-prone and astress-resistant individual

The distribution of stress

0 2 40

20

40

60

80

100

stress

Stressresistant individual

0 2 40

20

40

60

80

100

stress

Stressprone individual



Can a single negative event have a permanent effect on an individual?

0 2 40

20

40

60

80

100

stress

Stressresistant individual

0 2 40

20

40

60

80

100

stress

Stressprone individual

No: if we look at stress-resistant individual

Yes: if we look at stress-prone individual

Stress-prone individual can remain permanently stressed by a uniquenegative event



Why do single interventions (e.g. team building effort in a firm) help?

.



Why do single interventions (e.g. team building effort in a firm) help?

demands p go down — individual becomes stress-resistant



Does single intervention help to relieve symptoms or heal cause?

Back to normal when team-building effect is over and p is up again.Only symptoms are removed (temporarily)How can permanent effects be achieved?

Problem-focus: Adjust work-load, switch jobEmotion-focus: Adjust appraisal parameter φ (managment takes awayfear) or increase autonomous stress-reduction potential δ0 (gym andsports programmes for employees of firm)


4. Stress and communication patterns4.7 Are stress levels optimal?

Background

Stress has a negative connotationIf stress is defined as an alarm signal when emotional tension is “toohigh”, then stress should be avoidedGiven the present framework, one can discuss, however, whether thestress level the individual experiences is optimal

Questions

Is our everyday stress level to much, too little or just right?Given the individual solves a maximization problem, can the resultingstress level ever be not optimal?Decision behaviour here displays two “suspects”why stress levelmight not be optimal

Tolerance level W is exogenous (behavioural/ automatic)Mental resource constraint M (W ) +M (e) = M is an additionalconstraint


4. Stress and communication patterns4.7 Are stress levels optimal?

Intrapersonal “distortions”or disorders

Tolerance level WAn individual could choose the tolerance level W (smooth pastingcondition)Not only smooth communication is chosen optimally but also the levelat which an outburst is the better “stress-reduction technology”

Mental resource constraint M (W ) +M (e) = MThe individual could anticipate the mental resource constraint (add theconstraint to maximization problem)Requires quite some personal insight

Stress is constrained-optimal

... if tolerance level and mental resource constraint are “technologicalconstraints”... unless (going beyond the model) appraisal parameters (φ and χ)translating stressors into stress are accepted as truely exogenous


5. Conclusion

Background

Stress is a feeling that everybody experiences (at least) every now andthen

Stress induces various coping styles of which communication is aprominent one

Coping styles analysed are smooth communication and emotionaloutbursts

“Stress and communication” can be seen as an example for moregeneral “stress and coping”or “emotion regulation”

Smooth communication then stands for controlled and cognitiveapproach to emotion regulationEmotional outbursts stand for more impulsive, costless and fastapproach


5. ConclusionDeterminants of communication styles

Intensity of use of smooth communication: cost and benefits ofsmooth communication and outbursts

Prevalence of outbursts

stress-prone vs. stress-resistant individualsappraisal type φ, situation p, ability a and autonomous stress-reductionpotential δ0

Frequency of outbursts: Growth rate of stress ΦIncreasing the tolerance level W might lead to outburst cycles

Distribution of stress in world with surprises

Shocks can permanently push individual to outburst cycles

Reducing stressors temporarily can remove symptom (high stress,frequent outbursts)

Permanent effects only achievable via personality changes


Thank you!

Merci!

Vielen Dank!


Documents

Stress and Communication: An Economic Approach · Stress and Communication-An Economic Approach Klaus Wälde Gutenberg University Mainz and CESifo, Louvain-la-Neuve, Bristol October