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Is System Dynamics an "accurate" modeling tool?

Posted: Sat Apr 04, 1998 8:56 pm
by eduardo giordanelli
Ive been reading all messages about System Dynamics and forecasting.
I do not believe that we can pretend that a System Dynamics model
predicts anything in the social and economic area, because men learn and
adapt to new environments in many unpredictable ways that could change
the structure of the system.
There is also a problem concerning the feedback between the model and
its users who could change their previous behaviour as result of their
interpretation of the model.
I believe that in the social and economic area it is right to see a
System Dynamic model as a learning tool that could enable the user to be
the first to adapt or to create new situations.
On the other hand when we come to environmental, chemical and or
physical modelling is system dynamics an accurate, powerful modelling
tool or it has many flaws when we have to model complex engineering
systems?
My question could be stated in the following terms:
We use System Dynamics because is an easy, but not accurate, tool to use
? Or it could be an accurate tool when dealing with not learning systems
and becomes not accurate only when confronted with learning
environments?
I put this question because I am making a model in the environmental
policy area (water reuse) and after potential "market" is simulated
(social system) the model would simulate the impact on the environment
(physical and chemical system).
There are for this second part better tools than system dynamics?
Thank you,
Eduardo Giordanelli
Via Michelozzo 10
50037 San Piero a Sieve (Fi)
Italy
eduardo.giordanelli@galactica.it

Is System Dynamics an "accurate" modeling tool?

Posted: Sun Apr 05, 1998 12:18 pm
by George Richardson
On Wed, 4 Nov 1998, eduardo giordanelli wrote:

> My question could be stated in the following terms:
> We use System Dynamics because is an easy, but not accurate, tool to use
> ? Or it could be an accurate tool when dealing with not learning systems
> and becomes not accurate only when confronted with learning
> environments?

Saying one cant point forecast with a system dynamics model doesnt seem
to me to be the same as saying the model cant be "accurate." Our
model-based predictions are contigent forecasts and they can be quite
accurate within the contingent world encapsulated by the model.

If people learn from a model and alter the contingencies accordingly, that
means the model wont predict the future well because people altered the
future as a result of the model-based insights. But those same people
would not then turn around and accuse the model of being inaccurate. If
they had enough confidence in the model to alter policies, I would think
people would say the model looked quite or very "accurate" to them.

Maybe we need a better (more accruate?) term here.

But the basic point is true, that forecasting in human systems is
confounded by the fact that the forecast could cause humans to change and
thus make the forcast false. Such a phenomenon was labeled a "suicidal
prophecy" by none other than the father of Venn diagrams, John Venn
(1888), and was seen as the counterpart to Mertons "self-fulfilling
prophecy" (1948).

Presumably, nonliving systems, or systems that cant make sense out of the
structure, dynamics, and insights of system dynamics models, arent
subject to the suicidal prophecy phenomenon, and thus can be predicted
"accurately," up to the point allowed by the vagueries of any prediction.

Whatever we make of the "accuracy" discussion, Im pretty sure we dont
use system dynamics because its "easy." How many really insightful system
dynamics models do we know of?

...George Richardson
From: George Richardson <gr383@cnsvax.albany.edu>

Is System Dynamics an "accurate" modeling tool?

Posted: Thu Nov 05, 1998 7:55 am
by "George Backus"
Eduardo Giordanelli and others are concerned about whether system dynamics
is really a good forecasting tool in the absolute sense. I think most people
would agree that SD and all other methodologies CANNOT produce "accurate"
forecasts. As someone noted, the future only occurs in the future and there
are many, many elements and noises we can never hope to and never want to
model. The questions then becomes, "Is it the best among the terrible?"
Because cointegration is "currently" considered as being the best
econometric method for forecasting and SD out does it, we can say the SD
does a very lousy job at forecasting, but it is the best.

We can not really claim that SD is even good at describing systems (remember
some old chaos discussions on this server?), it merely provides us the best
chance of understanding the systems problems and designing a policy to
mitigate it. I would argue that models are always, at best, only a
"useful" solution to an ill-defined problem. In the extreme, they are then
to be judged (policy or forecasting) on their relative usefulness and no
other criteria.

G

George Backus, President
Policy Assessment Corporation
14604 West 62nd Place
Arvada, Colorado, USA 80004-3621
Bus: +1-303-467-3566
Fax: +1-303-467-3576
George_Backus@ENERGY2020.com

Is System Dynamics an "accurate" modeling tool?

Posted: Fri Nov 06, 1998 9:50 am
by "Michael J. Radzicki, Ph.D."
>But the basic point is true, that forecasting in human systems is
>confounded by the fact that the forecast could cause humans to change and
>thus make the forcast false. Such a phenomenon was labeled a "suicidal
>prophecy" by none other than the father of Venn diagrams, John Venn
>(1888), and was seen as the counterpart to Mertons "self-fulfilling
>prophecy" (1948).

This is also known as the "Lucas Critique" in macroeconomics.

Mike Radzicki
WPI
From: "Michael J. Radzicki, Ph.D." <mjradz@WPI.EDU>

Is System Dynamics an "accurate" modeling tool?

Posted: Fri Nov 06, 1998 10:56 am
by Bruce Hannon
Maybe Fidelity is the word we are looking for: Modeling Fidelity, rather
than modeling accuracy. The Fidelity is to the assumptions in the model.

Bruce Hannon, Jubilee Professor
Liberal Arts and Sciences
Geog/NCSA
220 Davenport Hall, MC 150
University of Illinois
Urbana, IL 61801
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