Session Reports - Tuesday11 AM Tuesday: System Dynamics and the Broader Strategy Field
The first presentation illustrated how the boundaries of corporate strategy models are expanding beyond firm and product markets to broader social influences and behavioral issues. The challenges covered included conflicting performance objectives, workflow bunching, commoditization, technology substitution and the influence of social factors on technology substitution. These important strategy issues were addressed with relatively simple causal loop diagrams and stock-flow models in Henry Weil’s presentation.
The second presentation emphasized how combining system dynamics core theory with widely used 'disciplines and methods' (analytical models, frameworks and problem solving approaches) can help make those 'disciplines and methods'’ more relevant to managing performance over time. Kim Warren also shared insights into how to present integrated models to get buy-in from the users.
The third presentation recounted the success of Sterman's People Express flight simulator and highlighted how building on this kind of model can more generally answer three questions: 'what are the origins of performance differences between firms,' 'how do dynamic processes lead to advantage,' and 'what's going to improve decision-making.'. The presenter, Scott Rockart, felt more longitudinal data would help in developing models that answer these questions. Full Report
C. Michael Reilly
11 AM Tuesday: Policy Design for Sustainability
Dr. Andy Ford chaired and presented a discussion of Global Warming and System Dynamics at the recent Boston Meeting of the System Dynamics Society in the session #144, Policy Design for Sustainability, held on Tuesday, July 31. The two other papers in this session were: "An Investigation into Electricity Subsidy Dynamics by a System Dynamics Approach" by Hoda Vaziri and Mohammad Akbarpour and Modeling Fishery Regulation and Compliance: A Case Study of the Yellowtail Rockfish, by Wayne Wakeland.
These three papers were similar in that each described a system dynamics (SD) treatment of a resource problem ranging from a simple and immediate biological example, the prediction of abundance of Yellowtail Rockfish in the Pacific, to a second and more complex social problem, that of power generation subsidies in Iran, and finally, to one of the most complex environmental situations that we face today, global climate change.
The Modeling of Yellowtail Rockfish by Wayne Wakefield discussed a model designed to predict fishery abundance on the Pacific Coast in order to account for several years of declining population and to formulate improvements in compliance and regulation. Models were presented which had included variables such as the carrying capacity of the ocean, overall abundance, information on spawning and harvesting and habitat health. Standard economic variables such as numbers of fishermen, boats, profits, enforcement and trip limits rounded out the model to make it suitable for economic fishery forecasts. Limited availability of useful data for this fishery, both on a yearly basis and a sufficiently long time series, was cited as a problem in creating accurate abundance predictions. Tests were made on this model’s predictive ability and the author discussed the need for improvement in new sustainability management policies.
An Investigation into Electricity Subsidy Dynamics by a SD Approach by Vaziri and Akbarpour dealt with a real and important problem for the country of Iran in its effort to stabilize its economy. The high government subsidy of electricity to all sectors of the economy: public, industrial, trade, household and agricultural, leads to a reduction in available government funds for Iranian investment in construction and infrastructure and a level of electricity consumption which was higher than the average in other developing countries. Curiously, this subsidy benefited higher income persons more than the poorer but the high use causes more blackouts. Vaziri and Akbarpour argue that the increase in the subsidy leads to more consumption which then causes a kind of “addiction” for electrical power by the populace and a continuation of the pressure on government to keep subsidies high. This addiction in consumption becomes "locked in" by the populace with a long decay time of several years and anytime the subsidy is reduced the people’s level of discontent increases. The models and curves presented in the paper showed these dynamics. A solution proposed by the authors suggests that the government of Iran use civic education to change the culture of power consumption to more moderate levels and, at the same time, gradually begin to raise the price of electricity to what a realistic (sustainable) level should be. Then government might be able to address other pressing national needs.
Andrew Ford in his paper, Global Warming and System Dynamics, presents quite a broad and solid view of the complexities of global change (GC) using, at the outset, the models of GC that George Richardson and Thomas Fiddaman had created. Throughout, Ford's style of argument is very clear and focused on presenting essential elements of the issue. Richardson's model is invoked as the basis to consider scientific uncertainties such as feedback effects: the role of water vapor, methane from permafrost and swamps, CO2 from soils and the so called "sea ice/albedo flip," a positive feedback process where the melting ice in the Arctic results in a lower albedo, greater solar heat retention and more warming. The resolution of these so called "structural uncertainties" in formulation will go to the heart of improving model structure and understanding. The inclusion of Fiddaman’s model in this presentation includes societal and political issues such pressure of population, the economy and changes in the production of energy and possible solutions. The awareness of carbon policy being shaped by economists and politicians leads directly to considering the relative values of market incentives and carbon taxes. At the end Ford brings these discussions closer to earth by considering actual prices and incentives available in the Western Electricity Co-ordinating Council for coal-fired and combined cycle units and tests various policy solutions for emissions reductions within the context of working industrial generation and transmission systems.
11 AM Tuesday: Education: University
This parallel session was chaired by C. Sherry Immediato and consisted of three presentations.
Sheldon Friedman and Steven A. Cavaleri
John J. Voyer
The first very interesting paper entitled "The Feedback Method of Teaching Macroeconomics: Is it Effective?" was presented by David Wheat, winner of the Dana Meadows Award 2007.
In his presentation he examined the conventional method of teaching macroeconomics with static graphs in comparison to the feedback method using causal loop diagrams and computer simulation models. To measure a significant difference he introduced four experiences. During these experiences students were supposed to choose static graphs to solve a problem or to use loop diagrams. The majority of the students made use of the feedback method because it made it easier for them to understand business dynamics. All in all, his paper is very interesting and I think that his work will help many students in understanding macroeconomics much better. David Wheat is also member in the Economic Chapter in order to introduce system dynamics to teaching.
Secondly, Sheldon Friedman presented in co-operation with his colleagues Steven A. Cavaleri and Mike Raphael the paper "Individual Learning Style and Systems Tool Preferences." It pointed out the relationship between specific system thinking tools and Kolb learning styles. During the research students had to play the B & B Enterprise Game, used the Kolb Learning Styles Inventory and had to answer questions.
It was a very interactive and interesting lecture. After the presentation, the audience asked questions and discussed existing issues about the model. Certainly, Sheldon Friedman and his colleagues can weave the information provided by the audience into their model.
The last presentation by John Voyer, Susan Bassi Brown, Nathan Gage, Dmitry Kovalenko and Travis Williams was entitled as "A System Dynamics Approach to Improving An Advising System for Business School Undergraduates." John Voyer pointed out that graduating seniors in a business school in the United States had to take part in a specific survey. One particular part attracted attention by low marks. Now, their aim was it to give different recommendations to change this situation.
11 AM Tuesday: Industry Dynamics
The 'Industry Dynamics' session at Seaport C on July 31, 2007, which chaired by Dr. Usman A. Ghani, was kicked off on time. About 30 or more members participated for the session. Professor Yaman Barlas (Modeling of Real Estate Price Oscillations in Istanbul) focused housing price dynamics in Istanbul, Turkey. Eva-Maria Cronrath and Alexander Zock (Forecasting the Diffusion of Innovations by Analogies: Examples of the Mobile Telecommunication Market) presented their first results on forecasting the diffusion of products in the telecommunication market . Professor Rosanna Garcia (Co-opetition for the Diffusion of Resistant Innovations: A Case Study in the Global Wine Industry using an Agent-based Model) explores whether and how competitive cooperation (co-opetition) can be utilized to speed the rate of diffusion of resistant innovations. In specific, she investigated screw caps on fine wines as a case study. After every individual presentation, the participants raised several questions, all of which were properly handled by the author(s). Even though three papers were combined together under the title of Industry Dynamics, their common grounds were comparatively narrow, except the dynamic phenomena per se.
11 AM Tuesday: Crime and public policy
The session covered models looking at aspects of simulating the operation of criminal justice systems in the Netherlands, Jamaica and in the US. The key motivation in all cases was to understand better how to influence the development of proposed legislation or the operation of the criminal justice system. All three models simulated, as a minimum, the flow of offenders through various stages of the relevant criminal justice system and the impact of their offences. The paper from the Netherlands (Etiënne Rouwette et al) described the work being done by a modeling group based at the Ministry of Justice and the influence it was having in framing new legislation. The paper from Jamaica (Jason Wilks et al) was concerned with the development of long term policies (up to 2030) in reducing the impact of organized crime in Jamaica within a holistic view including economic investment, health and the prison population. The paper from the US (Rod MacDonald and Mohammad Mojtahedzadeh) looked at the development of a flow model to help identify the system wide effects of technological improvements in terms of safety and productivity. The session identified a strong willingness for future exchanges of information and to share experience. Full Report
2 PM Tuesday: Systems Thinking, Mental Models, and Organizational Learning
Theme of the session attracted a huge audience, and those who came left satisfied. The first and the last presentations (by and Tsuey-Ping Lee and Rajat Dhawan) were based on experimental findings on the influence of systems thinking/system dynamics interventions on performance. The presentation by Pruyt and Kwakkel focused on the ethical aspects of system dynamics.
In the first presentation, Tsuey-Ping Lee described how systems thinking training influenced the thinking of public officials who have completed a one semester systems thinking graduate course. By using self-evaluated surveys the results of the study demonstrate that, after finishing the systems thinking course, questionnaire respondents request more from leaders to clarify organizational goals and to provide incentives for members to bring up innovative ideas. Specifically, the training led to increased appreciation of communication and teamwork. The presenter discussed the implications of the research to the design of systems thinking curriculum.
In their presentation, Pruyt and Kwakkel discuss ethics in the context of system dynamics. They described the scope of their research by defining 'ethics' as applied to their study. The presentation summarized existing literature in system dynamics which deals with ethics. By way of two examples – 'responsibility' and 'sustainable development' the presentation discussed the explicit consideration of ethics in system dynamics modeling. The presentation was quite balanced. On one hand the authors presented the advantages of combining ethics in modeling and on the other hand its drawbacks were discussed. Overall, the presentation by Pruyt and Kwakkel was well received by the audience.
Dhawan et al's presentation was based on an experimental study conducted on eighty participants. By way of a longitudinal study, the authors' aim was explore as to which elements of system dynamics training are retained after some time has elapsed. Results show that after five months of the initial intervention, participants forget many concepts and the use of system dynamics software. This loss is to the extent that they are unable to solve complex tasks such as inferring the behavior over time of variables in a two-stock system. However, the author confirmed that the abilities to solve simple one-stock tasks (like the bathtub task) and recognizing feedback loops are retained. The presentation evoked a good response from the audience.
2 PM Tuesday: Electricity Markets
This parallel session was chaired by Allyson Beall. It went very smoothly. The first speaker, Qian Hu, talked about electricity cycles in the Chinese electric industry. Experimental design based on system dynamics was employed to test two different hypotheses for the cyclical problem. A lot of people asked questions and gave very good suggestions, both to the presented paper and further work. The second speaker, Jung-Yeon Park examined the effect of various capacity payments on new investment in the Korean electricity market. Surveys and system dynamics modesl were carried out to find out whether fixed capacity payment or LOLP is better for reserve margin in Korea. Lots of questions were put forward about this topic. The last presentation was given by Charles Jones, on the topic of Mental Models in an Emerging Industry: The Photovoltaic Industry in Massachusetts. Charles gave a really wonderful speech. Most of the experts he had interviewed expressed dynamic growth as a result of positive feedback loop. However, Charles argued that policy makers should pay attention to the difference between global and local market effects. During his presentation, several people walking by stopped to attend the presentation, pushing the overall parallel to its peak. The parallel finished just on time. Full Report
2 PM Tuesday: Development Economics
The contributions in the Development Economics parallel session, chaired by Klaus John, covered a wide range of development issues such as capital goods and innovation, regulations and private sector activities as well as development planning.
Ana Maria Mora Luna and Pål Davidsen develop a formal model from an existing theory about the innovation process in the Columbian industry and provide a dynamic explanation for the poor innovation performance and the scarce level of technological capabilities.
Ahmed Salama, Khaled Wahba and Samir Makary analyze the problems constraining the private sector in Egypt such as complicated and costly rules and entry regulations and their dynamic impact on the Egyptian economy.Matteo Pedercini, Birgit Kopainsky, Pål Davidsen and Stephen Alessi describe the simplification of an existing simulation model for national development planning with the aim of providing an adequate basis for an interactive learning environment. Full Report
2 PM Tuesday: Behavioural Analysis
The Tuesday afternoon parallel session on Behavioural Analysis for the 2007 International Conference of the System Dynamics Society was held on Tuesday, July 31 st, at 2pm, and was chaired by Enrique Zepeda. The parallel session featured three presentations. The first presentation, A Comprehensive Model of Goal Dynamics in Organizations: Setting, Evaluation and Revision, by Yaman Barlas and Hakan Yasarcan, explains goal erosion due to persistent failure, and goal improvement due to confidence caused by success and conscious evaluation and adjustment of goals. The second presentation, Analytical methods for structural dominance analysis in system dynamics: An assessment of the current state of affairs, by Christian Erik Kampmann and Rogelio Oliva, describes challenges in analyzing how structure determines behavior, in particular for non-linear systems. The paper reviews three methods for structural dominance analysis: classical, Pathway Participation Metrics (PPM), and eigenvalue methods. The third paper, Do the Parallel Lines Meet? A Comparison between Pathway Participation Metrics and Eigenvalue Analysis, by Mohammad Mojtahedzadeh, was similar in theme to the second, and compared PPM and Eigenvalue methods, identifying strengths and weaknesses, and examining the relationship between metrics used in both. Full Report
Jeremy B. Sato
4:15 PM Tuesday: System Dynamics Pioneers Panel Discussion
This session featured three of Jay Forrester's earliest collaborators in our field: Ed Roberts, Jack Pugh, and Dave Packer. John Sterman began the session with a brief memorial to contributors to the field who have passed away. Peter Milling acted as host to the panel, posing questions to the three pioneers. Full Report
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