Abstract
System dynamics is a computer modeling technique that is used to solve problems in complex socioeconomic systems through the design or redesign of system structure. Its application often involves the elicitation and mapping of knowledge from experts and stakeholders who possess detailed information about the relevant structure and behavior of the system under study. A digital computer is then used to accurately trace through the dynamics inherent in the mapping – a task that humans cannot do reliably via thought and debate due to their inherent cognitive limitations.
The purpose of this chapter is to illustrate how Hayden’s Social Fabric Matrix can add value to system dynamics modeling by introducing discipline and an organizational framework based on institutional economic theory to the knowledge elicitation process. Potential pitfalls are discussed and examples are provided. An important conclusion is that the combination of the two tools can be profitably used for consensus building among experts – a result that is vital for effective policy formulation.
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Notes
- 1.
For detailed information on the system dynamics method the reader should consult Sterman (2000).
- 2.
See Forrester (1968).
- 3.
Of course, most evolutionary economists such as Gregory Hayden feel that actual socioeconomic systems never reach a state of equilibrium.
- 4.
Figure 3 was created with a system dynamics software package called Vensim. The figure is essentially a user-friendly picture of the equations that underlie the system dynamics model. If a user wishes to see the equations, they are a simple mouse click away.
- 5.
- 6.
Causal loop diagrams are also often used to present key feedback relationships from a completed system dynamics modeling project to an audience or reader.
- 7.
Actually, the causal loop diagram was first drawn iteratively on a white board during the brainstorming session, then copied onto notebook paper, and finally reproduced in a software program for presentation in this chapter.
- 8.
In the case in which the dependent variable is not a stock, a causal link is actually a picture of a partial derivative. See Sterman 2000 (p. 139).
- 9.
Most of the variables in Fig. 4 that are not part of a feedback loop(s) were not conceptualized to be exogenous, but rather as important components of feedback loops that exist in other sectors of the model economy. In other words, they represent points of linkage to other sectors of the model.
- 10.
For a collection of papers devoted to this controversy see Richardson et al. (1994).
- 11.
- 12.
Hayden (1982a).
- 13.
Hayden calls causal loop diagrams “sequence digraphs.”
- 14.
See Randers (1980) for more information on specifying a reference mode during the system dynamics modeling process. Specifying a reference mode would help experts and stakeholders tie the fabric of a socioeconomic system to its dynamic behavior.
- 15.
Mathematically, open systems are “dissipative” and closed systems are “Hamiltonian.” For more on this distinction see Radzicki (1988).
- 16.
In the extreme, the models would end up being exact replicas of the actual systems.
- 17.
Since the clouds in Fig. 7a represent an infinite source and an infinite sink, there are no limits to the number of immigrants and no constraints on the number of people who wish to leave Massachusetts (except a Massachusetts Population stock of zero) in the model. On the other hand, since the stocks in Fig. 7b cannot hold an infinite number of people, they implicitly have limits. Feedback from these stocks to the rates of immigration and emigration could be added that would reduce these flows as the system’s limits are approached.
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Radzicki, M.J. (2009). Convergence of the Social Fabric Matrix and Complex Modeling. In: Natarajan, T., Elsner, W., Fullwiler, S. (eds) Institutional Analysis and Praxis. Springer, New York, NY. https://doi.org/10.1007/978-0-387-88741-8_5
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