REPLY Meaning of Stock/Level (SD6900)

[SDMAIL George Richardson]

Posted by  George Richardson <gpr at albany.edu>

On Apr 9, 2008, at 7:59 AM, SDMAIL Alan McLucas wrote:
> "Trust" is an intangible which
> cannot be represented by this integral equation.  Therefore, we cannot
> build system dynamics models that contain stocks of intangibles such as
> "trust".  I appreciate the desire to build models which incorporate soft
> variables and intangibles, because ignoring such variables leads to
> erroneous models (Forrester), but building models that purport to
> represent soft variables and intangibles as stocks is not the answer.

On the contrary, soft concepts can indeed be represented as stocks and 
sometimes must be.  The representation has nothing to do with numerical 
details about integration, but rather has everything to do with the way 
such a soft variable persists through time and changes over time within 
the time frame of the model.

Way back in 1961 Forrester addressed the kind of thinking that surrounds 
the selection of stocks (levels) in a system dynamics model.  He said, 
in part:

> "Levels exist in the information network as well as in the physical 
> network of material, etc.  'Awareness levels' exist in the mental 
> attitudes that influence decisions.  Levels of satisfaction, of 
> optimism, and of recollection of a past disastrous depression, all 
> influence economic behavior.  ... All memory and continuity from the 
> past to the future exist in the levels of the system." (Industrial 
> Dynamics p. 68).

That memory would include things like trust and similar soft variables.  
Forrester talked about the "snapshot" test for stocks, and that bit of 
wisdom has been repeated in most texts since, e.g., Richardson and Pugh 
pp. 176-177.  They conclude

> "Thus potential levels in a system include such obvious accumulations 
> as poeple, inventory, production capacity, serum cholesterol, and bank 
> balances.  Included as well, however, are such things as cultural 
> traditions, average sales rates, habits, and perceptions, for these 
> too would not disappear if time were stopped.

There are numerous excellent examples in our literature of studies 
involving models that capture soft variables as stocks.  A recent 
example from our work at the University at Albany (Luna-Reyes et al., 
Anatomy of a Group Model Building Intervention: Building Theory from 
Case Study Research, SDR 22,4) is of interest because it reveals "trust" 
as a crucial variable in the case and the emergent theory, and the 
authors and the client group chose to model that as an accumulation.

That study and others have built upon a theory of the way soft variables 
like trust or commitment grow as artifacts (costocks and coflows) of 
working together.  "Producing" can do two things in a system:  it can 
create objects that accumulate in an inventory, and it can increase (or 
maybe decrease) the accumulation of trust or commitment, as people work 
together.  Examples of the theory and its application in serious group 
modeling interventions can be found in a couple of conference papers by 
Luna-Reyes et al. in the proceedings of the 2004 System Dynamics 
Conference.

 In these interventions, and a host of others, it has been essential 
that soft variables such as trust are treated as accumulations.

..George

George P. Richardson
Chair of public administration and policy
Rockefeller College of Public Affairs and Policy
University at Albany - SUNY, Albany, NY 12222
Posted by  George Richardson <gpr at albany.edu>
posting date  Thu, 10 Apr 2008 20:37:48 -0400