On the Foundations of System Dynamics
George P. Richardson
Rockefeller College of Public Affairs and Policy
University at Albany
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
1
Motivation
•
•
•
•
•
•
•
•
•
•
Feedback loops
Stocks and flows
Behavior-over-time graphs
System archetypes
Computer simulation
STELLA, Vensim, PowerSim
Nonlinearity, loop dominance
Compensating feedback
Policy resistance
Dynamic complexity
Rockefeller College of Public Affairs and Policy
University at Albany
• What is really deeply
important about systems
thinking and system
dynamics?
• …in education?
• …in corporate decision
making and policy design?
• …in public policy and
governance?
• …in theory building?
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
2
The Claim:
The deep foundation is the
Endogenous Point of View
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
3
Forrester’s Stated Foundations:
The four threads (1958)
•
•
•
•
Advances in computing technology
Growing experience with computer simulation
Improved understanding of strategic decision making
Developments in the understanding of the role of
feedback in complex systems
• But it took ten more years before Forrester published the
deep foundation of the system dynamics approach
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
4
Forrester’s Four-Tiered Hierarchy
Urban Dynamics, Market Growth as Influenced by Capital Investment
• Closed boundary around the system
• Feedback loops as the basic structural elements within
the boundary
• Level (stock) variables representing accumulations
within the feedback loops
• Rate (flow) variables representing activity within the
feedback loops
• Goal, Observed condition, Detection of discrepancy,
Action based on discrepancy
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
5
Forrester’s Four-Tiered Hierarchy
Urban Dynamics, Market Growth as Influenced by Capital Investment
• “Closed boundary around the system”!
• The “Closed boundary” signifies Forrester’s
Endogenous Point of View.
• It comes before feedback loops, stocks and flows,
graphs over time, and all the rest of what we do.
• It has top billing.
• It is the deep foundation of systems thinking.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
6
An Example
Pam's hurt
feelings
Sam's mean
behavior
• Exogenous point of view
• Sam is always mean to Pam.
• It’s all his fault.
• If he would be nicer, Pam’s
life would be better.
Pam's mean
behavior
Sam's hurt
feelings
(R)
Sam's mean
behavior
Pam's hurt
feelings
Rockefeller College of Public Affairs and Policy
University at Albany
• Endogenous point of view
• Maybe there is something
Pam is doing …
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
7
Exogenous and Endogenous Points of View
• “The fault, dear Brutus, is
not in our stars, but in
ourselves …”
• Cassius, in Shakespeare’s
Julius Caesar (1599)
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
9
Exogenous and Endogenous Points of View
• “We have met the enemy and He is Us.”
• Walt Kelly’s Pogo, originally on an Earth Day poster, 1970.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
10
Exogenous and Endogenous Points of View
• Man is not the creature
of circumstances.
Circumstances are the
creatures of men.
• Benjamin Disraeli,
Vivian Grey, 1827
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
11
Feedback Loops are a Consequence of the
Endogenous Point of View
S
P
B
A
E
Q
E
C
D
B
A
D
C
R
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
12
Expanding the Boundary to Enable
an Endogenous Point of View
S
P
B
A
E
Q
E
C
D
B
A
D
C
R
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
13
Endogeneity and Feedback
Feedback loops enable the endogenous point
of view and give it structure.
[Richardson 1991]
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
14
Examples
• Global Warming
• Flood Damage
• Terrorism
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
15
The Global Warming Discussion
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G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
16
400,000 Years of Temperature Data
http://www.landcareresearch.co.nz/research/globalchange/climate_change.asp
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
17
100 Years of Temperature Data
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
18
CO2 Concentration
http://www.landcareresearch.co.nz/research/globalchange/climate_change.asp
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
19
Methane
http://www.landcareresearch.co.nz/research/globalchange/climate_change.asp
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
20
Yes, the peaks
line up.
But if it’s been going
on for 400,000 years,
why do we now think
humans are to blame?
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
21
Milankovitch Cycles (1,000,000 yrs)
There are strong exogenous, structural effects on climate change.
Rockefeller College of Public Affairs and Policy
G. P. Richardson
[Source: http://en.wikipedia.org/wiki/Malankovitch_cycles]
University at Albany
System Dynamics Conference, Seoul, Korea, July 2010
22
Both perspectives
involve stock-andflow / feedback
dynamics
The water cycle
The carbon cycle
Heat trapping
- Water vapor
- Atmospheric CO2
- Other GH gases
- Cloud cover
Heat reflecting
- Ice albedo
- Cloud albedo
- Aerosols
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
23
Both may even
acknowledge
reinforcing
feedback loops
Water vapor
Cloud cover
Ice albedo
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
24
The Global Warming Debate
• Exogenous view: We are in the warm phase of a
100,000 year cycle caused by exogenous, structural
characteristics
• Policy implication: Adapt to the inevitable
• Endogenous view: Human activity is exacerbating the
natural cycle
• Policy implication: Alter human habits to minimize the
coming tragedies
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
25
Largely Exogenous Views of Terrorism
(various internet sources; see paper)
• Ethnicity, nationalism/separatism, poverty and economic disadvantage,
globalization, (non)democracy, Western society, disaffected intelligentsia,
dehumanization, and religion
• Marginalization, ethnicity and nationalism, religion, cultism, free flow of
weapons, training of non-military personnel, no pure democracy present
• Belief causes terrorism.
• Foreign domination and control of Muslim resources, the hatred of the
Western way of life. alienation. poverty and illiteracy. moral decadence of the
West. the West's support for Israel.
• Economic deprivations, political injustices, foreign occupation and denial of
fundamental rights including the right to self-determination
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
26
Terrorist Incidents Over Time
(Source: http://www.start.umd.edu/gtd/features/GTD-Data-Rivers.aspx)
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
27
Endogenous View of
Structure and Dynamics of Terrorist Cells
Peripheral
support
Funding
(R)
Suppression
activities
(R)
(R)
(R)
Zeal
(B)
New
(R) Terrorist
recruits
group
(R)
Martyrs to
the cause
Rockefeller College of Public Affairs and Policy
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Terrorist
actions
(B) Losses
(R)
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
28
Terrorism
• Exogenous view: Violent forces exist that threaten
others, and they are growing.
• Policy implication: Defend to prevent harm; attack to weaken
or eliminate the violent forces.
• Endogenous view: Violent forces interact with defenses
and attacks to create the rising tensions we observe.
• Policy implication: Defend to prevent harm; minimize
behaviors that create nasty reinforcing loops; maximize
creation of beneficial reinforcing loops; work toward crosscultural understandings.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
29
An Exogenous View of Flood Damage
Flood frequency
Structural
mitigation policies
Flood severity
Flood damage
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
30
Flood Damages (Deegan 2007, NOAA)
• Increasing coastal populations?
• Increasing severity of floods (global warming)?
• 1968 National Flood Insurance legislation?
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
31
A Model of Floods in which
Identical Floods Do Not Cause Identical Damage
Flooding and Damage
100 properties
20 flooding
2
2
2
2
2
2
2
2
50 properties
10 flooding
2
2
3
2
2
3
2
2
1
2
1
2
0 properties
0 flooding
3
1
1
1960 1965
Damaged Properties 1
Vulnerable Properties 2
3
3
flooding : base
3 1
3
1970
1
1
1
1975
1
2
1
2
3
3
1
1
3
Rockefeller College of Public Affairs and Policy
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1
1
2
3
3
1985
1
2
3
1
1980
2
3
3
3
1
3
1
2
3
3
1995
1
2
3 1
1
1990
1
2
3
2000
1
2
3
3 1
1
2
3
2
3
3
3
1
3
1
2005 2010
1
properties
2 properties
3 flooding
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
32
Underlying Causes of Damage:
Evolution of Land Use and Natural Barriers
Indicators
100 % developed
20 flooding
2
2
2
50 % developed
10 flooding
2
2
4
4
5
2
5
6
5
6
5
6
1
4
6
6
5 6
1
0 % developed
2
1
3 5
5
1
4
1
4
4
4
3
0 flooding
3
1
6
3
3
3
1 3
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Time (year)
Mitigated Property : base 1
% developed
1
1
1
1
1
1
Vulnerable Property
% developed
2
2
2
2
2
2
2
Damaged Properties : base
3
3
3
3
3
3
3 % developed
Undeveloped Property : base
% developed
4
4
4
4
4
4
Rockefeller
College
of
Public
Affairs
and
Policy
Natural Barriers
5
5
5
5
5
5
5G. P. Richardson
5 flooding
StructuralUniversity
Projects
at Albany
System Dynamics
Conference,
Seoul, Korea,
6
6
6
6
6
6
6 July 2010 flooding
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An Endogenous View of Flood Damage
relative attractiveness
of protective policies
R: Moral
Hazard
Policy
Entrepreneurs
for Mitigation
+
+
+
knowledge of
vulnerable
property
+
-
-
-
+
willingness to
+
mitigate property
Available
Land
+
perceived
benefits of land
development
Development in
Potential Hazard
B: New
Development
Pressure
willingness to +
continue
development
+
Stakeholders for
Land Development
+
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Natural Barriers
-
+
-
+
B: Policy
Entrepreneurs
Vulnerable Property
in Hazard Prone
Area
R: Property
Tax Revenue
Pressure
+
sense of security
from relief policies
+ Damage
+
Stakeholders
for Relief
Insurance and
Engineered
Solutions
problems requiring
property tax revenue
+
Perceived Risk
of Damage
B:
Mitigation/
Perceived
Risk
+
B:
Environment
Capacity
willingness to
relocate
Causal Map
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
34
Flood Damage
• Exogenous view: Floods happen sometimes; the greater
the flood, the worse the damage.
• Policy implication: When floods happen to occur, recover and
rebuild.
• Endogenous view: Damage occurs when hazard meets
vulnerability; vulnerability is a result of people policies
• Policy implication: Recognize human role in damage. Work
with stakeholders to minimize vulnerabilities.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
35
Governing
• The great insight of servomechanisms
engineering:
• The act of trying to govern / manage / control
generates system dynamics of its own.
• “A closed-loop control system is thus an error-sensitive
system and, being such, it acquires certain peculiarities
and idiosyncrasies which, in large measure, are the
reasons for this book” (Gordon Brown, 1948).
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
36
A Forrester Story Vividly Illustrating
Control Generating Dynamics of its Own
One time we were making feedback control systems with some highpowered applications – I think it was a 10-horsepower motor with a
hydraulic control system to drive probably some kind of military gun
mount. I remember one night I was working with it, and something
went wrong.
It had become unstable, and it began to go back and forth at the
maximum speed that the 10-horsepower motor would drive it. Some of
the hydraulic lines had broken, and it was spraying oil into the air, and I
was trying to get it stopped.
As I rushed over to try to turn it off, I slipped in the oil on the floor.
What I remember is seeing the rainbows in the oil spray up against the
lights… which is a lesson on oscillatory behavior.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
37
Exogenous Endogenous
Predominant Mode of Analysis
The “X/N” Matrix
Striving for
understanding and
leverage, but failing
JK
Achieving
understanding and
leverage
JJJ
Accepting fate,
Predicting, Preparing
KL
Confused, Misguided,
Misguiding
LLL
Exogenous
Endogenous
True (Predominant) State of Affairs
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
38
Is Endogeneity the Foundation of
All Systems Approaches?
• Suggested characterization:
“Systems thinking is the mental effort to uncover
endogenous sources of system behavior.”
• Maybe.
• But certainly, the Endogenous Point of View is
fundamental to systems thinking in the system
dynamics tradition.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
39
The Foundation of System Dynamics
• Suggested definition:
“System dynamics is the use of informal maps
and formal models with computer simulation to
uncover and understand endogenous sources of
system behavior.”
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
40
The Foundation of System Dynamics
• What do systems thinkers and system
dynamicists do?
• We use systems thinking, management insights
and computer simulation to
• hypothesize, test, and refine endogenous
explanations of system change, and
• to use those explanations to guide policy and
decision making.
Rockefeller College of Public Affairs and Policy
University at Albany
G. P. Richardson
System Dynamics Conference, Seoul, Korea, July 2010
41