A model of hysteresis arising from social interaction within a firm

Luis A. Rios, Dmitrii Rachinskii, Rod Cross

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)
67 Downloads (Pure)


This paper subscribes to the view that a key distinguishing feature of a firm is its social nature. We present a model in which hysteresis arises from the social interactions between employees. Employees have a simple response to incentives in the form of the pay available outside the firm relative to that available within the firm. Allowing for social interaction, whereby employees are influenced by the effort levels of fellow employees, leads to the distinctive effects, such as lazy relay responses to incentives, associated with hysteresis.

Original languageEnglish
Article number012011
Number of pages12
JournalJournal of Physics: Conference Series
Issue number1
Publication statusPublished - 3 Mar 2017


  • hysteresis
  • social interaction


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