[System Dynamics] Thinking in Systems

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Introduction

This series are notes of reading \<\<Thinking in Systems>>, by Donella H. Meadows.

Content is organized into three parts:

• Part One: System Structure and Behavior

  • The definition and characteristic of system
  • Two very basic models of system
  • System variations
    • One stock system
    • Two stock system

• Part Two: Systems and Us

• Part Three: Creating Change - in Systems and in our Philosophy

I particularly like Donella's presentation, A Philosophical Look at System Dynamics, which intrigued me to purchase this book.

Ashley Hodgson, a Ph.D. in economics from UC Berkeley, curated a series of book review. In her reviews of \<\<Thinking in Systems>>, she approached the subject from an economic perspective, shared her learning experiences - what were her confusions, and how she resolved these confusions.

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System Structure and Behavior

What is a System

1. Definition: A system is an interconnected set of elements that are coherently organized to achieve a specific purpose. It consists of elements, interconnections, and a function or purpose.

   Elements	Connectors	Purposes
   teachers, administrators, students	salary structure, rules	educate students

2. Characteristics of Systems:

   • In this framework, the connectors play a central role, creating relationships between the parts and driving dynamics within the system. (Watch video)
   • Many interconnections operate through the flow of information, making connectors the most powerful component of a system. (Watch video)
   • Understanding a system's elements is easier than comprehending its interconnections.
   • Systems' purposes are derived from a system's behavior, not from rhetoric or stated goals.

3. System Purposes and Subordinate System Purposes: Ensuring harmony between sub-purposes and the overall system purpose is a crucial function of successful systems.

4. Factor Impact Analysis on System State:

   • As you move from left to right, changing each factor—elements, connectors, and purposes—progressively exerts a greater influence on the system's state.

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System Structure and Behavior

Stock and Flow

Using a bathtub as an example, the stock of a bathtub is a function of previous inflow and outflow.

Insights:

• A stock takes time to change because flows take time to flow, and flow takes time to flow because system elements have their own inherent responsiveness to signals.
• Time lags resulting from slowly changing stocks can create problems in systems, but they can also serve as sources of stability. This provides room to maneuver, experiment, and revise policies that may not be working.
• Stocks allow inflows and outflows to be decoupled and temporarily out of balance with each other.
• Most individual and institutional decisions are designed to regulate the levels of stocks.
• With some examples mentioned, we learn that in a system thinker's eyes, they see the world as a collection of feedback processes.

However, not all systems have feedback loops. Some systems are relatively simple open-ended chains of stocks and flows.

Categorize Systems by Feedback Loop Types

Feedback loop answers how a system runs itself.

• What is feedback loop: A feedback loop is a closed chain of causal connections from a stock, through a set of decisions, rules, physical laws, or actions that depend on the level of the stock, and back again through a flow to change the stock.

• Categorize systems by feedback loop types:

  • Balancing Feedback Loop (Goal-Seeking or Stability-Seeking): Take a person drinking coffee as an example.
    
  • Reinforcing Feedback Loop (Enhances Whatever Direction of Change is Imposed): Take a savings bank account as an example.
    

Concepts Introduced by Feedback Loop:

• Shifting Dominance
• Complex behaviors of systems often arise as the relative strengths of feedback loops shift, causing first one loop and then another to dominate behavior.

=> A system can cause its own behavior.

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System Structure and Behavior - Categories

One Stock System

A Stock with Two Balancing Loops (Example: Home Heating System)

(The home heating system diagram)

(The breakpoint chart for the heating system)

• Insights
  • The Delay:
  • The information delivered by a feedback loop can only affect future behavior.
  • We can't have an impact fast enough to correct the behavior that drove the current feedback.
  • This means there is always a delay in responding; a flow can't react instantly to another flow.
  • The Breakpoint

One Stock System - A Stock with One Reinforcing Loop and One Balancing Loop

• Kind: One Stock System
• Example: Population and industrial economy

Concepts & Ideas

• Dominance & Shifting Dominance: Complex behaviors of systems often arise as the relative strengths of feedback loops shift, causing first one loop and then another to dominate the behavior.
• System Dynamic Models Explore Possible Futures and Ask 'What If' Questions:
  • Are the driving factors likely to unfold this way?
  • If they did, would the system react in this way?
  • What is driving the driving factors? This question probes the system boundaries and requires a hard look at those driving factors to determine if they are truly independent and embedded in the system.

The Delay in Balancing Feedback Loop

• Example: Car dealership inventory management

A System Without Delay

VS

Considering there actually delay(delays) in system:

The Effect Brought by Delay

A delay in a balancing feedback loop makes a system likely to oscillate.

Recap

(From Ashley, viewing systems from a stock perspective)

Regarding the oscillation chart, Jokes from Ashley about the meeting rooms in federal rate meetings tend to be either too hot or too cold because people adjust the temperature way too high or too low. (delay)

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System Structure and Behavior - Categories

In reality, any physical, growing system is going to run into some kind of constraints, sooner or later.

That constraint will take the form of a balancing loop that in some way shifts dominance of the reinforcing loop driving the growth behavior, either by strengthening the outflow or by weaken the inflow.

Two stock systems

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Systems and Us

Why Systems works well

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Systems and Us

Why Systems Surprise Us

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Systems and Us

System Traps ... and Opportunities

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Part Three: Creating Change - in Systems and in our Philosophy

Leverage Points - Places to intervene in a System

• Leverage Points application
  • Seeking a leverage point is a common goal, but it often proves counterintuitive due to the complexity of the system.
  • Additionally, it's easy to misdirect our efforts inadvertently.
  • Similar concept like leverage points is introduced in the 'Logical Thinking Process,' but it remains uncertain whether subsequent chapters delve into the impact of feedback loops on a system's state.
  • Generalizing a system model is not advisable due to systems' inherent complexity.
• Leverage Points
  • System and System Parameters
  • Altering a system's parameters typically does not lead to significant changes to a system because of its structural characteristics.
  • Most systems have evolved or been designed to operate well outside the range of critical parameters, so the numbers are not worth the sweat put into them.
  • Buffer and system: Buffer brings both stability and inflexibility to a system, think about a river vs a lake.
  • Leverage points in physical system is to design it properly at first places, due to changing physical system is slow and expensive
  • Delay: The length of time relative to the rates of system change. So the delay time is a leveraging point for a system.

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Part Three: Creating Change - in Systems and in our Philosophy

Living in a world of Systems

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References

Review by Ashely Hodgson