Please read each challenge carefully (from the textbook, as shown below) and provide the required answer.? Challenge 1: Identifying Link and Loop Polarity (section 5.2.3, p. 145, F

撃ii_3蚤妻賢哲季曇 苧腎門塁間毒雷S

Sy離 em S T的毒軸岳ngand

醐◎鮎 §裏mg紬葛'晶 監om p崇母X脚or§d

昏iS憲章発撃等墨等ぎ発桑野鹿 奪

Sys骨em等耳的重訂痛 貞門gand

MoeBe巨岳悶g骨0㌢讃 監¢獅 野営exW即匡d

JohnD.Sterman

MassachusettsInstituteofTechnology

SloanSchoolofManagement

幽腰 閲脱水甘言告婁 Boston BurrRidge,lL Dubuque,lA Madison,WINewYork SanFrancisco St.Louis

Bangkok Bogota Caracas Lisbon London Madrid

MexicoCity Milan NewDelhiSeoulSingapore Sydney TaipeiToronto

McGraw-HillHigherEducation ADLmSLOnOfTheMcGraw-HillCompames

BUSINESSDYNAMICS SYsTEMSTHINKINGANDMoDELINGFORACoMPLEXWoRLD

Copyright㊨2000byTheMcGraw-HillCompaniesJnc.Allrightsreserved.PrintedintheUnited StatesofAmerica･ExceptaspermittedundertheUnitedStatesCopyrightActof1976,nopartof thispublicationmaybereproducedordistributedinanyformorbyanymeans,orstoredina databaseol-retrievalsystem,withoutthepriorWrittenpermissionofthepublisher.

Thisbookispnntedonacid-freepaper.

10QWV/QWVO987

ISBN-13:978-0-07-231135-8

ISBN-10:0-07-231135-5

Publisher:JejfreyJ.Shelstad

Seniorsponsorlngeditor:ScottIsenberg

Marketingmanager:ZinaCrqft

Seniorprojectmanager:GladysTrue Seniorproductionsupervisor:LoriKoetters Freelancedesigncoordinator:Ma7TLI.Christianson Freelancecoverdesigner:TheVl-sual Coverimage'.㊨SoniaDelaunay/i&MServices,AmsterdamuateGallery,London/ArtResoluCe,NY Compositor:GAC/Indianapolis Typeface:ll/13Tl'mesRoman Printer:QuebecorPrintingBookGroupWersailles

LibraryofCongressCataloging-in･PublieationData

Sterman,John.

Businessdynamics:systemsthinkingandmodelingfb∫acomplexworld/JohnD.Sterman. p･cm･

Includesbibliographicalreferencesandindex･ ISBN0-07-231135-5(礼lk.paper) ilIndustrialmanagement･ 2･Systemtheory. 3.Managementinformationsystems.I.

Title.

HD30.2.S7835 2000 658.4′038′011-dc21

99-056030

http:〟www.mhhe.com

ForCindy

ABOUTTHEAuTHOR

JohnD.Stermanis∫.SpencerStandishProfessorofManagementattheSloan SchoolofManagementoftheMassachusettsInstituteofTechnologyandDirector

ofMIT'sSystemDynamicsGroup.Hisresearchcentersonthedevelopmentof practiCalmethodsforsystemsthinkinganddynamicmodelingofcomplexsys-

tems,Withapplicationstoorganizationalleamlngandchange,operationsmanage- ment,corporatestrategy,andnonlineardynamicsinawiderangeofsystems,from supplychainstoscientificrevolutions.HehasplOneeredthedevelopmentofman-

agementflightsimulatorsofcorporateandeconomicsystems.Theseflightsimul latorsareusedinresearchtounderstandandimprovemanagerialdecisionmaking

incomplexdynamicsystems;moreimportantly,theyarenowwidelyusedbycor- porationsanduniversitiesaroundtheworldforteaching,problemsolving,andpol- 1Cydesign.ProfessorStermandiscoveredsystem dynamicsmodelinginhigh school,studieditasanundergraduateatDartmouthCollege,andreceivedhisPhD

fromMIT･HehasbeenawardedtheJayW ForresterPrize,glVenforthebestpubl lishedworkinthefieldofsystemdynamicsoverthepriorfiveyears,andhasfour timeswonawardsforteachingexcellencefromthestudentsoftheSloanSchool.

Vl

Acceleratlngeconomic,technological,social,andenvironmentalchangechallenge managersandpolicymakerstolearnatincreasingrates,Whileatthesametimethe complexltyOfthesystemsinwhichweliveisgrowlng･Manyoftheproblemswe nowfaceariseasunantlCIPatedsideeffectsofourownpastactions.Alltoooften thepoliciesweimplementtosolveimportantproblemsfail,maketheproblem worse,orcreatenewproblems.

Effectivedecisionmakingandlearninglnaworldofgrowingdynamiccom-

plexityrequiresustobecomesystemsthinkers-toexpandtheboundariesofour mentalmodelsanddeveloptoolstounderstandhowthestructureofcomplexsys- temscreatestheirbehavior.

Thisbookintroducesyoutosystemdynamicsmodelinglbrtheanalysisofpol- lCyandstrategy,withafocusonbusinessandpublicpolicyapplications･System dynamicsisaperspectiveandsetofconceptualtoolsthatenableustounderstand thestructureanddynamicsofcomplexsystems.SystemdynamicsisalsoarlgOr-

Ousmodelingmethodthatenablesustobuildformalcomputersimulationsofcom- plexsystemsandusethemtodesignmoreeffectivepoliciesandorganizations･ Together,thesetoolsallowustocreatemanagementflightsimulators-micro- worldswherespaceandtimecanbecompressedandslowedsowecanexperience thelong-termsideeffectsofdecisions,speedlearnlng,developourunderstanding ofcomplexsystems,anddesignstructuresandstrategleSforgreatersuccess.

Thefieldofsystemdynamicsisthriving.Overthepastdecade,manytopcom- panies,consultingfirms,andgovernmentalorganizationshaveusedsystemdy- namicstoaddresscriticalissues.Moreinnovativeuniversitiesandbusiness

schoolsareteachingsystemdynamicsandfindingenthusiasticandgrowlngen- rollments.Hundredsofprimaryandsecondaryschools,fromkindergartentohigh school,areintegratlngSystemsthinking,systemdynamics,andcomputersimula- tionintotheircurricula.Toolsandmethodsforsystemdynamicsmodeling,theli-

braryofsuccessfulapplications,andinsightsintotheeffectiveuseofthetoolswith executivesandorganizationsareallexpandingrapidly･

vii

viii Preface

FEATURESAh旧 にoNTENT

Universltyandgraduatelleveltexts,particularlythosefocusedonbusinessand publicpolicyapplications,havenotkeptpacewiththegrowthofthefield.This

bookisdesignedtoprovidethoroughcoverageofthefieldofsystemdynamicsto- day,byexaminlng

｡Systemsthinkingandthesystemdynamicsworldview;

･Tわolsfわrsystemsthinking,Includingmethodstoelicitandmapthe

structureofcomplexsystemsandrelatethosestructuresto血eirdynamics;

･Tbolsformodelingandsimulationofcomplexsystems;

｡Proceduresfortestlngandimprovlngmodels;

｡Guidelinesfわrworkingwithclientteamsandsuccessfulimplementation｡

Youwilllearnaboutthedynamicsofcomplexsystems,includingthestructures

thatcreategrowth,goal-seekingbehavior,oscillationandinstability,S-shaped growth,overshootandcollapse,pathdependence,andothernonlineardynamics. Examplesandapplicationsinclude

･Corporategrowthandstagnation,

･Thediffusionofnewtechnologies,

｡ThedynamicsofinfectiousdiseasesuchasHIV/AIDS,

･Businesscycles,

｡Speculativebubbles,

｡Theuseandreliabilityofforecasts,

｡Thedesignofsupplychainsinbusinessandotherorganizations,

｡Servicequalitymanagement,

･Transportationpolicyandtrafficcongestion,

･Projectmanagementandproductdevelopment,

andmanyothers.

ThegoalofsystemsthinkingandsystemdynamicsmodelinglStOimproveour understandingofthewaysinwhichanorganization'sperformanceisrelatedtoits

internalstructureandoperatingpolicies,includingthoseofcustomers,competl- tors,andsuppliersandthentousethatunderstandingtodesignhighleveragepoli- ciesforsuccess.Todosothisbookutilizes

｡ProcessPointsthatprovidepracticaladviceforthesuccessfulapplication ofthetoolsinrealorganizations.

･CasestudiesofSystemDynamicsinActionthatpresentsuccessful

applicationsrangingfromglobalwarmingandthewarondrugsto reenglneerlngthesupplychainofamajorcomputerfirm,marketing strategylntheautomobileindustry,andprocessimprovementinthe petrochemicalsindustry,

Systemdynamicsisnotaspectatorsport.DeveloplngSystemsthinkingandmod- elingskillsrequlreStheactivepartlClpationofyou,thereader,via

Preface lX

･Challenges.Thechallenges,placedthroughoutthetext,glVeyouPractice withthetoolsandtechniquespresentedinthebookandwillstimulateyour

orlglnalthinkingaboutimportantrealworldissues･Thechallengesrange fromsimplethoughtexperimentstofull-scalemodelingprojects.

｡Sim111ationsoftwareandmodels.TheaccompanyingCD-ROMandweb

site(http:〟www.mhhe.com/sterman)includeallthemodelsdevelopedin thetextalongwithstate-of-the-artsimulationsoftwaretorunthem･There areseveralexcellentsoftwarepackagesdesignedtosupportsystem dynamicsmodeling.Theseincludeithink,Powersim,andVensim.TheCD andwebsiteincludethemodelsforthetextinallthreesoftwareformats.

Thediskalsoincludesfullyfunctionalversionsoftheithink,Powersim,and VensimsoftwaresoyoucanrunthemodelsusinganyOfthesepackages

withouthavingtopurchaseanyadditionalsoftware･

･Additionally,theInstructor'sManualandinstructor'ssectionofthe websiteincludesuggestedsolutionslbrthechallenges,additional asslgnmentS,Powerpointfileswiththediagramsandfiguresfromthetext

suitablefortransparencies,suggestedcoursesequencesandsyllabi,and othermaterials.

lNTENDEDAuDIENCE

Thebookcanbeusedasatextincoursesonsystemsthinking,simulationmodel-

1ng,COmplexlty,Strategicthinking,Operations,andindustrialenglneerlng,among others.Itcanbeusedinfullorhalf-semestercourses,executiveeducation,and

self-study.Thebookalsoservesasareferenceformanagers,englneerS,COnSul- tants,andothersinterestedindeveloplngtheirsystemsthinkingskillsoruslngSyS-

temdynamicsintheirorganizations｡

A NoTEONMATHEMATICS

Systemdynamicsisgroundedincontroltheoryandthemoderntheoryofnonlin- eardynamics.Thereisanelegantandrigorousmathematicalfoundationforthe theoryandmodelswedevelop.Systemdynamicsisalsodesignedtobeapractical

toolthatpolicymakerscanusetohelpthemsolvethepresslngproblemstheycon- frontintheirorganizations.Mostmanagershavenotstudiednonlineardifferential equationsorevencalculus,orhaveforgottenitiftheydid･Tobeuseful,systemdy-

namicsmodelingmustbeaccessibletothewidestrangeofstudentsandpractlClng managerswithoutbecomingaVagueSetOfqualitativetoolsandunreliablegener- alizations.ThattensioniscompoundedbythediversltyOfbackgroundswithinthe communltyOfmanagers,students,andscholarsinterestedinsystemdynamics,

backgroundsrangingfrompeoplewithnomathematicseducationbeyondhigh schooltothosewithdoctoratesinphysics.

X Preface

jFYouDoN'THAVEASTRONGMATHEMATICSBACKGROUND, FEARNo†

Thisbookpresentssystemdynamicswithaminimumofmathematicalformalism. Thegoalistodevelopyourintuitionandconceptualunderstanding,withoutsacri- ficingtherlgOrOfthescientificmethod.Youdonotneedcalculusordifferential equationstounderstand血ematerial.Indeed,theconceptsarepresenteduslngOnly text,graphs,andbasicalgebra･Mathematicaldetailsandreferencestomoread- Vancedmaterialaresetasideinseparatesectionsandfootnotes.Highermathemat- ics,thoughuseful,isnotasimportantasthecriticalthinkingskillsdevelopedhere.

fFYouHAVEASTRONGMATHEMATICSBACKGROUND,FEARNo†

Realisticandusefulmodelsarealmostalwaysofsuchcomplexltyandnonlinearlty thattherearenoknownanalyticsolutions,andmanyofthemathematicaltoolsyou havestudiedhavelimitedapplicability.Thisbookwillhelpyouuseyourstrong technicalbackgroundtodevelopyourintuitionandconceptualunderstandingof complexltyanddynamics.Modelinghumanbehaviordiffersfrommodelingphys- icalsystemsinenglneerlngandthesciences.Wecannotputmanagersuponthelab benchandrunexperimentstodeterminetheirtransferfunctionorfrequencyre- sponse.Webelieveallelectronsfollowthesamelawsofphysics,butwecannot assumeallpeoplebehaveinthesameway.Besidesasolidgroundinglnthemathe- maticsofdynamicsystems,modelinghumansystemsrequlreSuStOdevelopour knowledgeofpsychology,decisionmaking,andorganizationalbehavior･Finally, mathematicalanalysts,Whilenecessary,isfarfromsufficientforsuccessfulsys-

temsthinkingandmodeling.Foryourworktohaveimpactintherealworldyou mustlearnhowtodevelopandimplementmodelsofhumanbehaviorinorganiza- tions,withalltheirambigulty,timepressure,personalities,andpolitics.Through- outthebooklhavesoughttoillustratehowthetechnicaltoolsandma血ematical conceptsyoumayhavestudiedinthesciencesorenglneerlngCanbeappliedtothe messyworldofthepolicymaker.

FEEDBACK

Iwelcomeyourcomments,Criticisms,andsuggestions.Suggestionsforadditional examples,cases,theory,models,flightsimulators,andsoon,tomakethebook morerelevantandusefultoyouareespeciallyinvited.Iwillupdatethewebsite toincorporateuserfeedbackandnewmaterials･Emailcommentsto<[email protected] mit.edu>.

AcKNOWLEDGMENTS

Thisworkbenefitedimmenselyfromtheadvice,criticism,andencouragementof manycolleagues,students,andfriends.Ioweanimmeasurabledebttomyfirst systemdynamicsteachers,DanaMeadows,DennisMeadows,andJayForrester, fortheirintegrlty,highstandards,andpassionatecommitment.I'mparticularly indebtedtotheexceptlOnalstudentsoftheMITSloanSchoolofManagement. Theyconstantlychallengemetomakethedisciplineofsystemdynamicsrelevant,

Preface Xl

useful,andexcltlng;Ihopethey'velearnedasmuch丘.ommeasI'velearnedfrom them.Inaddition,IthankmycolleaguesattheSloanSchoolandinthesystem dynamicscommunltyaroundtheworld,whohelpedbyprovidingdataandexam- ples,reviewingthedraft,testlngearlyversionsintheircourses,andincountless otherways･Thisgroupincludes(butisnotlimitedto)thefollowingfolksand institutions:

TarekAbdel-Hamid(NavalPostgraduateSchool);DavidAndersen,George Richardson(SUNYAlbany);EdAnderson(Univ.ofTexas);CarlosAriza,Sharon

EIs,KenCooper,JimLyneis,HankTaylor(Pugh-RobertsAssociates);George Backus(PolicyAssessmentCorporation);BentBakken(NorwegianDefenseRe- searchEstablishment);YamanBarlas(BogaziciUniversity,Istanbul);Michael Bean(PowersimCorp.);EricBeinhocker,DamonBeyer,AndrewDoman,Usman Ghani,MauriceGlucksman,PaulLangley,NormanMarshall(McKinseyand

Company);LauraBlack,JohnCarroll,VanessaColella,ErnstDiehl,SteveEp- plnger,CharlieFine,MilaGetmansky,PauloGoncalves,JanetCouldWilkinson, JimHines,NanLux,BradMorrison,TimNugent,NelsonRepennlng,EdRoberts, ScottRockart,GeorgeRoth,EdSchein,PeterSenge(MIT);AllenandJane Boorstein;SteveCavaleri(CentralConnecticutStateUniv･);GeoffCoyle(Royal MilitaryCollegeofScience,UK,retired);BrianDangerfield(Univ.ofSalford); PalDavidsen(Univ.ofBergen);Jim Doyle,MikeRadzicki,KhalidSaeed (WorcesterPolytechniclnstitute);BobEberlein,TomFiddaman,DanGoldner, DavidPeterson,LauraPeterson(VentanaSystems);DavidFoleyandJudyBerk; AndyFord(WashingtonStateUniv.);DavidFord(TexasA&M University); NathanForrester(A,T.Kearney);RichGoldbach(MetroMachineCorp.);Chris- tianHaxholdt,HeatherHazard(CopenhagenBusinessSchool);JackHomer (HomerConsulting);JodyHouse(OregonGraduateInstitute);Billlsaacs(Dia- logos);Sam lsraellt(ArthurAndersen);NitinJoglekar(BostonUniv.School ofManagement);DrewJones(SustainabilityInstitute);ChristianKampmann, ErikMosekilde(TechnicalUniv･ofDenmark);DanielKim,VirginiaWiley (PegasusCommunications);CraigKirkwood(ArizonaStateUniv.);Elizabeth KrahmerKeating(NorthwesternUniv.);DonKleinmuntz(Univ.ofIllinois, Urbana-Champaign);DavidKreutzer(GKA,Inc.);RobertLandel(Dar°enSchool ofBusiness,Univ.ofⅥrginia);DavidLane(LondonSchoolofEconomics);Erik Larsen(CityUniversity,London);WinstonJ.Ledet,WinstonP.Ledet(TheMan-

ufacturingGame,Inc.);RalphLevine(MichiganStateUniv･);AngelaLipinski (SocietyforOrganizationalLearning);MartinGroJ3mann,FrankMaier,Peter Milling(Univ.ofMannheim,Germany);AliMashayekhi(SharifUniv.ofTech- nology,Teheran);NathanielMass(GenCorp);PaulMonus(BP/Amoco),John Morecroft,AnnvanAckere,Kin Warren(LondonBusinessSchool);Erling Moxnes(NorwegianSchoolofEconomicsandBusinessAdministration);Rogelio Oliva(HarvardBusinessSchool);MarkPaich(ColoradoCollege);StevePeterson, BarryRichmond(HighPerformanceSystems);GregPetsch(CompaqComputer); NickPudar(GeneralMotors);JackPugh,JuliaPugh,RobertaSpencer(System DynamicsSociety),JQrgenRanders(WorldWildlifeFundInternational);Nancy Roberts(LeslieCollege);JennyRudolph(BostonCollege);JorgeRufat-Latre (Strategos);AnjaliSastry,MarshallvanAIstyne(UniversityofMichigan);Bob Stearns;SusanSterman;JimThompson(GlobalProspectus,LLC);John帆)yer

xii Preface

(Univ.ofSouthernMaine);LyleWallis(Decisio,Inc.);JimWaters(WatersBusi- nessSystems);JasonWittenberg(HarvardUniv.);EricWolstenholme(Lee°sBusi一

messSchool,UK);PavelZamudioRamirez(MonitorCompany);theCopenhagen BusinessSchool,ThelnternationalNetworkofResourcelnformationCenters

(akatheBalatonGroup),McKinseyandCompany,theNorwegianSchoolof Management,Pugh-RobertsAssociates,theSocietyforOrganizationalLearnlng, theTechnicalUniversityofDenmark,and,ofcourse,theMITSloanSchoolof Management.

SpecialthankstoHighPerfわrmanceSystems,Powersim,SA,andVentana Systems-andtheirgreatpeople-forprovidingtheirsimulationsoftwareand translationsofthemodelsfortheCDandwebsite.

TheteamatIrwinMcGraw-Hilldeservesspecialmentionfortheirenthusiasm,

patience,andeditorialhelp,particularlyScottIsenberg,CarolRose,JeffShelstad, andGladysTrue.

CaraliarberandKelleyDonovanprovidedimportantsecretarialsupport. KathySullivanwentbeyondthecallofdutyonlibraryresearch,datacollec-

tion,editorialchanges,andgraphics, Finally,theloveandsupportofmyfamilyhavebeenconstantandessential.

Thanks,Cindy,David,andSarah.

Prefaee vii

PARTI PERSPECTIVEANDPROCESS 1

1 Learn1nglnandaboutComplexSystems 3 1.1 1ntroduction 3

1.1.1 PolicyResistance,theLawofUnintendedConsequences, andtheCounterintuitiveBehaviorofSocialSystems 5

1.1.2 CausesofPolicyResistance 10 l.1.3 Feedback 12

1.1.4 ProcessPoint.･TheMeaningofFeedback 14 CIlallenge:DynamicsofMultiple-LoopSystems 14

1.2 LearnlnglsaFeedbackProcess 14 1.3 BarrierstoLeamlng 19

1.3.1 DynamicComplexity 21 1.3.2 LimitedInformation 23 1.3.3 ConfoundingVariablesandAmbiguity 25

1.3.4 BoundedRationalityandtheMisperceptions ofFeedback 26

13.5 FlawedCognltiveMaps 28

1.3.6 ErymeousInferencesaboutDynamics 29 1.3.7 UnscientlficReasoning/JudgmentalErrors

andBiases 30

Challenge:HypothesisTesting 30 1.3.8 DefensiveRoutinesandInterpersonalImpediments

toLearnlng 32

1.3.9 ImplementationFailure 33

1.4 RequlrementSforSuccessfulLearnlnginComplexSystems 33 1.4.1 ImprovlngtheLearmngProcess:Virtues

ofTrl'rtualWorlds 34 1.4.2 PitfallsofⅥrtualTYorlds 35 1.4.3 WhySimulationIsEssential 37

1.5 Summary 39

xdlii

XJV Contents

2 SystemDynamicsinAetion 41 2･1 ApplicationsofSystemDynamics 41 2.2 AutomobileLeasingStrategy:GoneToday,HereTomorrow 42

2.2.1 DynamicHypothesis 44 22.2 ElaboratlngtheModel 48 2.2.3 PolicyAnalysis 51

2.2.4 ImpactandFollow-up 54

2.3 0nTimeandUnderBudget:TheDynamics ofProjectManagement 55 23.1 TheClaim 56

2.3.2 InitialModelDevelopment 57 23.3 DynamicHypothesis 58 2.3.4 TheModelingProcess 61 2.3.5 ContinuingImpact 64

2.4 PlaylngtheMaintenanceGame 66 2.4.1 DynamicHypothesis 67 2.4.2 TheImplementationChallenge 74 2.4.3 Results 76

2.4.4 TransferringtheLearning:TheLimaExperience 77 2,5 Summary:PrinciplesforSuccessfulUseofSystemDynamics 79

3 TheModelingProcess 83 3.1 ThePurposeofModeling:ManagersasOrganizationDesigners 84 3.2 TheClientandtheModeler 84

3.3 StepsoftheModelingProcess 85 3.4 Modelinglslterative 87 3.5 0verviewoftheModelingProcess 89

3.5.1 ProblemArticulationITheImportanceofPurpose 89 3.5.2 FormulatingaDynamicHypothesis 94 3.5.3 FormulatlngaSimulationModel 102 3.5.4 Testlng 103 3.5.5 PolicyDesignandEvaluation 103

3.6 Summary 104 4 StructureandBehaviorofDynamieSysもems 107

4.1 FundamentalModesofDynamicBehavior 108 4.1.1 ExponentialGrowth 108 4.i.2 GoalSeeking 111 4.1.3 0scillation 114 4.1.4 ProcessPoint 116

Challenge:IdentifyingFeedbackStructure fromSystemBehavior 117

4.2 InteractionsoftheFundamentalModes 118

4.2.1 S-ShapedGrowth 118 4.2.2 S-ShapedGT10WthwithOvershoot 121 Cha土lenge:IdentifyingtheLimitstoGrowth 121 42.3 0vershootandCollapse 123

4.3 0therModesofBehavior 127

4.3.1 Stasis,orEquilibrium 127

Contents

4.3.2 Randomness 127 4.3.3 Chaos 129

4.4 Summary 133

PARTII TOOLSFORSYSTEMSTHINKING 135

5 CallSalLoopDiagrams 137 5.1 CausalDiagramNotation 137 5.2 GuidelinesforCausalLoopDiagrams 141

5.2.1 CausationversusCorrelation 141

5.2,2 LabelingLinkPolarity 142

Challenge:AssigningLinkPolarities 143 5.2.3 DeterminingLoopPolarity 143 Challenge:IdentifyingLinkandLoopPolarity 145 CIlallenge:EmployeeMotivation 147 5.2.4 NameYourLoops 148 5.2.5 IndicateImportantDelaysinCausalLJinks 150 5.2.6 VariableNames 152

5.2.7 Tl'psforCausalLoopDiagramLayout 153 5.2.8 ChoosetheRightLevelofAggregation 154 5.2.9 Don'tPutAlltheLoopsintoOneLargeDiagram 154 52.10 MaketheGoalsofNegativeLJOOPSExplicit 155 5.2.11 DistmguishbetweenActual

andPerceivedConditions 156

5.3 ProcessPoint:DeveloplngCausalDiagrams fromInterviewData 157

Challenge:ProcessImprovement 158 5.4 ConceptualizationCaseStudy:ManaglngYourWorkload 159

5.4.1 ProblemDefinition 159 5.4.2 Ident的7ingKeyVariables 160

5･4･3 Developl:ngtheReferenceMode 160 5.4.4 DeveloplngtheCausalDiagrams 163 5.4,5 LimitationsoftheCausalDiagram 166 Challenge:PolicyAnalysiswithCausalDiagrams 168

5.5 AdamSmith'slnvisibleHandandthe FeedbackStructureofMarkets 169

Challenge:TheOilCrisesofthe1970S 172 Challenge:SpeculativeBubbles 173 Challenge:TheThoroughbredHorseMarket 174 5.5.1 MarketFailure,AdverseSelection,

andtheDeathSpiral 174 Challenge:TheMedigapDeathSpiral 176

5･6 ExplainingPolicyResistance:TrafficCongestion 177 5.6.1 MentalModelsoftheTrajficPy10blem 178 5.6.2 CompensatingFeedback:TheResponse

toDecreasedCongestion 181 5.63 TheMassTransitDeathSpiral 185 5.6.4 PolicyAnalysis:TheImpactofTechnology 188 5.6.5 CompensatingFeedback:TheSource

ofPolicyResistance 189

XV

XVl Contents

Challenge:IdentifyingtheFeedbackStructure

ofPolicyResistance 190

5･7 Summary 190 6 StoeksandFlows 191

6.1 Stocks,Flows,andAccumulation 191

6.1.1 DiagrammingNotationforStocksandFlows 192

6.1.2 MathematicalRepresentationofStocksandFlows 193 6.1.3 TheContributionofStockstoDynamics 195

6･2 IdentifyingStocksandFlows 197 6.2.1 UnitsofMeasureinStockandFlowNetworks 198 6.2.2 TheSnapshotTest 199

Challenge:IdentifyingStocksandFlows 201 6.2.3 Conse7WationofMaterialin

StockandFlowNetworks 201

6.2.4 State-DeterminedSystems 202

6.2.5 AuxiliafTVariables 202 6.2.6 StocksChangeOnlythroughTheirRates 204 6.2.7 ContinuousTl'meandInstantaneousFlows 206

6.2.8 ContinuouslyDivisibleversusQuantizedFlows 207

6.2.9 WhichModelingApproachShouldYouUse? 208 6.2.10 Py10CeSSPoint:PortrayingStocksandFlows

inPractice 209

6.3 MappingStocksandFlows 210

6.3.1 WhenShouldCausalLoopDiagramsShow StockandFlowStructure? 210

Challenge:AddingStockandFlowStructure toCausalDiagrams 211

Cha11enge:LinkingStockandFlowStructurewithFeedback 212 6.3.2 AggregationinStockandFlowMapplng 213

Challenge:ModifyingStockandFlowMaps 213 Challenge:Disaggregation 214

6.3.3 GuidelinesforAggregation 216 6.3.4 SystemDynamicsinAction:

ModelingLarge-ScaleConstructionProjects 218 63.5 SettingtheModelBoundafT:

"ChallenglngtheClouds" 222 6.3.6 SystemDynamicsinAction.･AutomobileRecycling 225

6.4 Summary 229 7 DynamicsofStoeksandFlows 231

7.1 RelationshipbetweenStocksandFlows 232 7.1.I StaticandDynamicEquilibrium 232 7.1.2 CalculuswithoutMathematics 232

7.1.3 GraphicalIntegration 234

Challenge:GraphicalIntegration 239 7.1.4 GraphicalDIHerentiation 239

Challenge:GraphicalDifferentiation 241

7･2 SystemDynamicsinAction:GlobalWarmlng 241

Contents xvii

7･3 SystemDynamicsinAction:TheWaronDrugs 250 7.3.1 TheCocaineEpidemicafter1990 258

7･4 Summary 262 8 ClosingtheLoop:

DynamiesofSimpleStructures 263

8.1 First-OrderSystems 263

8,2 PositiveFeedbackandExponentialGrowth 264 8.2.1 Analytl'cSolutionfortheI/inearFirst-071derSystem 265 8.2.2 GraphicalSolutionoftheLinearFirst-Order

PositiveFeedbackSystem 266 8.2.3 ThePowerofPositiveFeedback:DoublingTl'mes 268 Challenge:PaperFolding 268

8.2.4 MisperceptionsofExponentialGrowth 269 8.2.5 ProcessPoint/OvercomingOverconfidence 272

8.3 NegativeFeedbackandExponentialDecay 274 8.3.1 Tl'meConstantsandHalf-Lives 279 Challenge.･Goal-SeekingBehavior 281

8.4 Multiple-LoopSystems 282 8.5 NonlinearFirst-OrderSystems:S-ShapedGrowth 285

Challenge:NonlinearBirthandDeathRates 286 8.5.1 FormalDefinitionofLoopDominance 288 8.5.2 First107derSystemsCannotOscillate 290

8.6 Sum ary 290

PARTIll THEDYNAMICSOFGROWTH 293

9 S･ShapedGrowth:Epidemics,InnovationDiffusion,andtheGrowthof NewProducts 295

9.1 ModelingS-ShapedGrowth 296 9.1.1 LoglSticGrowth 296 9.1.2 AnalyticSolutionoftheLogisticEquation 297 9.1.3 0therCommonGrowthModels 299

9.1A TestingtheLogisticModel 300 9.2 DynamicsofDisease:ModelingEpidemics 300

9.2.1 ASimpleModelofInfectiousDisease 300 9.2.2 ModelingAcuteInfection:TheSIRModel 303 9.2.3 ModelBehavior:TheTl'pplngPoint 305 Challenge:ExploringtheSIRModel 308 9.2.4 ImmunizationandtheEradicationofSmallpox 309 Challenge:TheEfficacyofImm unizationPrograms 310 9.2.5 He71dlmmunity 312 9.2.6 MovingPasttheTl'pplngPoint:MadCowDisease 314 Chal1enge:ExtendingtheSIRModel 316 9.2.7 ModelingtheHW/AIDSEpidemic 319 Challenge:ModelingHIV/AIDS 321

9.3 InnovationDiffusionasInfection:

ModelingNewldeasandNewProducts 323 93.1 TheLogisticModelofInnovationDl# usion:

Examples 325

xviii Contents

9.3.2 ProcessPoint:HistoricalFitandModelValidity 328 9.3.3 TheBassDlHusionModel 332 Challenge:PhaseSpaceoftheBassDiffusionModel 333 9.3.4 BehavioroftheBassModel 334 Challenge:CritiqulngtheBassDiffusionModel 334 Challenge:ExtendingtheBassModel 335 9.3.5 FadandFashion:

ModelingtheAbandonmentofanInnovation 339 Challenge:ModelingFads 341 9.3.6 ReplacementPurchases 342 Challemge:ModelingtheLifeCycleofDurableProducts 345

9.4 Summary 346 10 PathDependenceandPositiveFeedbaek 349

10,1 PathDependence 349 Challenge:IdentifyingPathDependence 353

10.2 ASimpleModelofPathDependence:ThePolyaProcess 354 10.2.1 GeneralizingtheModel:NonlinearPolyaProcesses 357

10.3 PathDependenceintheEconomy:VHSversusBetamax 359 Challenge:FormulatingaDynamicHypothesis fortheVCRIndustry 364

10.4 PositiveFeedback:TheEngineofCorporateGrowth 364 10.4.i ProductAwareness 365

10.4.2 UnitDevelopmentCosts 367 10.4.3 PriceandProductionCost 368

10.4.4 NetworkEjfectsandComplementafTGoods 370 10.4.5 ProductDIHerentiation 371 10.4.6 NewProductDevelopment 373 10.4.7 MarketPower 374

10.4.8 MergersandAcqulSitions 375 10.4.9 WorkforceQualityandLoyalty 376 10.4.10 TheCostofCapital 378 10Al1 TheRulesoftheGame 380 10.4.12 AmbitionandAspirations 380 10.4.13 CreatingSynergyforCorporateGrowth 382

10.5 PositiveFeedback,increasingReturns,andEconomicGrowth 385 10.6 DoestheEconomyLockintoInferiorTechnologies? 387 10.7 LimitstoLockln 389

10.8 ModelingPathDependenceandStandardsFormation 391 10.8.1 ModelStructure 392 10.8.2 ModelBehavior 396

10.8.3 PolicyImplications 402 Challenge:PolicyAnalysIS 403 Challenge:Ext

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.