Introduction To System Dynamics

Introduction to System Dynamics Emilio Porta Pallais [email protected]

How do we determine our actions? In order to have success we have to focus on……

Actions

Outcomes

How do we determine our actions?

Actions

Outcomes Mental Models

Constructing good mental models is a complex task Complex reality

Broad and simple

In depth and specific

Constructing good mental models is a complex task

Y Production of milk

= (β1 X1, = f (GDP,

See any problem? What is missing?

β2 X2,

food prices,

β3 X3, …..)

interest rates, …..)

Constructing good mental models is a complex task Factor 1 Factor 2 Factor 3

...

Factor n

Outcomes

Constructing good mental models is a complex task Good team Continuous learning

Good product

Success Leadership

Clear vision Sufficient financial resources

Constructing good mental models is a complex task ■

3 big challenges: ◆

Establishing the limits of the model and selecting variables

◆

Understanding the ways the variables interact and affect each other

◆

Understanding and representing causality

Four Fundamental Truths about Models ■

Truth 1: We all construct mental models about the realities that we must face.

No one has reality in their head.

Four Fundamental Truths about Models ■

Truth 2: Everyone mentally simulates models for… - making sense of daily life

(deciding why he/she is doing this or why this happened)

- making decisions (predicting the consequences of actions and alternatives that we are considering)

The most common term for mental simulation is: thinking!

Four Fundamental Truths about Models To produce models with ithink, you will be doing things that you have done every day of your life, but you will be doing them with a new tool and a new set of hypotheses about how the world works. The new tool and a new set of hypotheses will allow you to…

+ construct higher-quality mental models + simulate models with more reliability + communicate them more effectively

Four Fundamental Truths about Models ■

Truth 3: “All models are wrong...

Some models are useful.” W.E. Deming

Four Fundamental Truths about Models As far as the laws of mathematics refer to reality, they are not certain, and as far as they are certain, they do not refer to reality. Albert Einstein

Four Fundamental Truths about Models ■

Truth 4: “Even though all models are wrong, we do not have an alternative to using them.”

B.M. Richmond

Statements like, “You can’t model that,” or “That is very coplicated to model” usually do not make sense.

Purpose of the workshop The real questions are… • Construction: How well are the realities in question captured by the model? + Have they selected essential, interrelated elements and omitted the non-essential ones? + Are the elements and relationships that have been included representative of reality?

• Simulation: How reliable are the simulations? • Comunication: How easy is it to effectively share the model and its deductions?

Purpose of the workshop To read and write with the ithink software, you need to develop the following skills… ■

Using language (so you can read and write using stocks and flows)

■

Mechanics of using the software

Example: To use Microsoft Word, you need both the mechanics of using the software and the language to write.

The second skill is not easy… Therefore, we will work with the language first.

Purpose of the workshop ■

When you leave the workshop, you will be able to… • Read and critique a model of stocks/flow • Example: You will be able to see if a model is useful for analyzing a topic. • Modifying a model/sub-model to suit your needs. • Developing an interface to communicate your model with other decisionmakers and policymakers.