16th MIT-UAlbany-WPI System Dynamics Ph.D. Colloquium

Friday, April 25th, 2008
Rockefeller College of Public Affairs & Policy - University at Albany
Room: Milne 200

Organizers: Navid Ghaffarzadegan (UAlbany), John Lyneis (MIT)

Time

Presentation

Speaker

10:00

Collapse of Easter Island: Understanding an agricultural society's collapse

Burak Turkgulu, UAlbany

10:45

System Identification

Kawika Pierson, MIT

11:30

Breaking the vicious cycle of poverty - Micro-Lending

Niyousha Hosseini, UAlbany

12:15

Lunch

 

1:00

A dynamic simulation model for examining the implications of limited materials availability: The case of platinum

Elisa Alonso, MIT

1:45

Adaptive and Deliberate Change in Organizations - A Case Study of the New York Stock Exchange

Nici Zimmerman, UAlbany

2:30

Break

 

2:45

Social Responsibility as an Organizational Capability: The Case of Building Maintenance

John Lyneis, MIT

3:30

Effect of Conditional Feedback on Learning

Navid Ghaffarzadegan, UAlbany

4:15

Closing Remarks, Informal gathering

 

Participents:

    Faculty: David Andersen, Oleg Pavlov, George Richardson, Khalid Saeed
    Studnets: Bahadir Akcam, Elisa Alonso, Gokhan Dogan, Travis Frank, Navid Ghaffarzadegan, Niyousha Hosseinichimeh, Joe Hsueh, Hyunjung Kim, John Lyneis, Kawika Pierson, Ryan Taylor, Burak Turkgulu, Andy Whitmore, Nici Zimmermann
    Amber Blocks Ltd.: Allen Boorstein

Abstracts:

Collapse of Easter Island: Understanding an agricultural society's collapse
Burak Turkgulu, UAlbany

This study aims at explaining the collapsing behavior of collapsing populations using system dynamics methodology and using Easter Island as a case study. This work is triggered by Jared Diamond’s (2005) popular book and Brander and Taylor’s (1998) economic model of Easter Island. A system dynamics model representing the resource and population sectors of Easter Island has been built based on allocation of labor. First, base cases have been considered for the hunter/gatherer society and the agricultural society. Later, sensitivity analyses have been run to see the behavioral changes with respect to the parameters used in the model. It is found out that the erosion is the main natural process yielding the collapsing behavior. An interesting finding of the study is that differentiation between a forest and an agricultural sector is crucial while studying the decline of agricultural societies because the dynamics implied by their replenishment rates differ considerably.

System Identification
Kawika Pierson, MIT

Steming from a conversation with Andy Whitmore following his presentation at the last colloquium, we explore methods of system identification when data on each of the state variables is available.  Examples from artificially created data sets as well as real business applications are presented in order to illustrate some of the things to watch out for when undertaking this kind of analysis.

Breaking the vicious cycle of poverty - Micro-lending
Niyousha Hosseini, UAlbany

Micro-lending has been introduced as an effective antipoverty tool in recent decades. However, not all of micro-lending institutes are successful both in accomplishing their mission and in loan recovery. According to World Bank's focus note (2006), less than a quarter of its projects that funded micro-lending were judged successful. This paper describes a specific type of micro-lending (Grameen way of micro-lending invented by Mohammad Yunus, Nobel Peace Prize winner 2006). Then it summarizes the differences of conventional bank and Grameen Bank. Also this paper illustrates the important loops that make the Grameen successful both in the loan recovery and in accomplishing its mission. The final contribution of this paper is to develop a system dynamics model to test some Grameen policies that researchers believe are the key elements of Grameen's success. I find support for the fact that small loan size which is designed to match the client's knowledge maximizes Grameen's capital. Also the model finds that investing some portion of Grameen's capital, giving loan to groups of people and choosing appropriate interest rate are crucial for Grameen Bank.

A dynamic simulation model for examining the implications of limited materials availability: The case of platinum
Elisa Alonso, MIT

South Africa produces 77% of global primary platinum and when power shortages there forced mines to cut production, the impact was large.
High market concentration is one of a number of metrics that screen for risk of material scarcity. A simulation model using ordinary differential equations is used to examine scarcity risks to supply chain downstream firms. The model tries to capture the dynamics of supply, demand and price in the platinum market. The detailed structures of supply and demand were key features of the model. Results show that one risk-mitigation strategy available to downstream firms can be increased recycling.

Adaptive and Deliberate Change in Organizations – A Case Study of the New York Stock Exchange
Nici Zimmermann, UAlbany

Organizations are assumed to react to environmental changes either by adaptation or deliberate change, or they are assumed not to adapt at all. The New York Stock Exchange was long said to not react at all to the movement to automation in its environment, yet it then adapted quickly and suddenly. Explaining the internal dynamics that caused this punctuated equilibrium behavior will be a focus of my dissertation. Additionally I am showing under what circumstances dynamics are generated that cause a smooth adaptation to external changes or non-adaptation and organizational death. For these dynamics pressures from customer groups, from internal stakeholders as well as the inward orientation of management are of importance.

Social Responsibility as an Organizational Capability: The Case of Building Maintenance
Presenter: John Lyneis, MIT

Research on social responsibility has highlighted both the benefits that responsible practices can bring to organizations, and some of the ways by which individuals can influence change from within organizations.  Here, I study one organization that has both management support and committed individuals, but yet still faces a substantial challenge to reduce the greenhouse gas emissions of its buildings.  Building on the concept of social responsibility as an organizational capability, I show that reducing building energy use at this organization will require overcoming years of neglect in the way that buildings were maintained.  The condition of buildings and of any maintenance organization can easily erode – due to dynamics familiar to those in System Dynamics – making this responsible practice a difficult one to implement, develop and maintain over time.

Effect of Conditional Feedback on Learning  
Navid Ghaffarzadegan, UAlbany

Formal studies of decision threshold learning assume full feedback conditions, that is, no matter what the decision is (positive or negative), the decision maker will be provided by feedback. However, in the real world, feedback may be conditional on the decision made. In this paper, we investigate how conditional feedback can result in biased decisions. First, based on signal detection theory, a dynamic model of threshold learning is proposed. Then, the model is adjusted to examine effects of conditional feedback on learning and decision making. Then, the model is used to replicate some empirical findings. The results suggest conditional feedback can be a barrier to learning. Further, this study warns about problems of the current assumption of full feedback condition in most dynamic decision-making studies.