metaphorical models and credible worlds insights from small and stylized models or54 edinburgh...
TRANSCRIPT
Metaphorical Models and Credible Worlds
Insights from Small and Stylized Models
OR54 EdinburghSeptember 2012
John MorecroftLondon Business School
John Morecroft London Business School
Outline
Stylised Models and Credible Worlds - two classic models from economics
Useful Properties of Stylised Models
World Dynamics as a Credible World for exploring global industrial growth and sustainability
Comments on Modelling, Realism and Learning
John Morecroft London Business School
Stylised Models and Credible Worlds
Akerlof’s 1970 ‘market for lemons’
Schelling’s 1978 ‘checkerboard city’
... based on Robert Sugden’s interpretation
John Morecroft London Business School
Useful Properties of Stylised Models
Few concepts; clear key assumptions about enduring traits of individuals and/or institutions
Skillfully embedded in a ‘context’
Plausible and sufficiently understandable to stimulate comparisons with the real world
Vivid interpretation that slips easily between the real world and the model
… these properties enable inductive reasoning
John Morecroft London Business School
Asset Stocks and Coordination in a Stylised Model of an Industrial Society
Capital discard
Capital investment
Industrial Capital
Pollution absorption
Pollution generation
Pollution
Output and Material Standard of Living
John Morecroft London Business School
Asset Stocks and Coordination in Jay Forrester’s World Dynamics Model
DeathRate
Birthrate
Population
Capital in agriculture
Food ratio
Land area
Adapted from pages 20-21 of World Dynamics by Jay Forrester, Pegasus Coomunications, Waltham MA 1973.
Natural resource usage rate
Natural resources
Capital discard
Capital investment
Industrial Capital
Pollution absorption
Pollution generation
Pollution
Material Standard of Living
1900 1940 1980 2020 2060 2100
PopulationQualityof Life
NaturalResources
PollutionCapital
John Morecroft London Business SchoolSource: World Dynamics by Jay Forrester, Pegasus Communications, Waltham MA 1973.
Base CaseArchive Simulation of World Dynamics
Basic world model behaviour showing the mode in which industrialisation and population are suppressed by falling natural resources
John Morecroft London Business SchoolSource: World Dynamics by Jay Forrester, Pegasus Communications, Waltham MA 1973.
A 75% technological improvement in the efficiency of resource usage unleashes additional growth that eventually leads to an
unintended pollution crisis.
1900 1940 1980 2020 2060 2100
Population
Capital
Pollution
Qualityof Life
Natural Resources
Better TechnologyArchive Simulation of World Dynamics
John Morecroft London Business School
Modelling and Realism – A Spectrum of Model Fidelity
AircraftFlight
Simulatorto train pilots and rehearse
crisis scenarios
Schelling’sCheckerboard
Cityto explore the issue
of segregation and tochallenge preconceptions
High fidelity Low fidelity
Adapted from Chapter 10 of Strategic Modelling and Business Dynamics by John Morecroft, Wiley 2007.
World Dynamicsto explore the paradox ofgrowth and sustainability
in an industrial society
Analogue Illustrative Metaphorical
Realistic detail Limited detail Minimal detail and accurate scaling yet plausible scaling yet transferable insight
John Morecroft London Business School
Thank You
Related Publications
Akerlof GA 1970. The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, Quarterly Journal of Economics, 84: 488-500.
Forrester JW. 1973. World Dynamics (2nd ed.) Pegasus Communications, Waltham MA. The 1st edition of World Dynamics was published in 1971 by Wright-Allen Press, Cambridge MA.
Morecroft JDW. 2007. Strategic Modelling and Business Dynamics, Wiley, Chichester UK.
Morecroft JDW. 2012. Metaphorical Models for Limits to Growth and Industrialisation, forthcoming in Systems Research and Behavioral Science.
Schelling TC. 1978. Micromotives and Macrobehavior, Norton, New York.
Sugden R. 2000. Credible Worlds: The Status of Theoretical Models in Economics, Journal of Economic Methodology 7: 1-31.
John Morecroft London Business School