Ausgewählte sozioökonomische Probleme der Gegenwart: Systems thinking and systems simulation

In a world becoming more and more dynamic and complex, systems thinking and systems simulation becomes a critical skill for effective decision making and learning in the context of current socio-economic problems.

In particular, managers and decision makers in the economic fields are confronted with accelerating social, economic, technological, and environmental change that requires understanding und learning at increasing rates. Decisions and actions in a complex world often result in unanticipated side effects and unintended consequences. All too often, many social-economic policies that are intended to solve current pressing problems fail or make the problem worse. In many cases, they create new undesirable problems.

Systems thinking and systems simulation, which is grounded in systems theory and related fields, helps us to expand the boundaries and limitations of our mental models in order to analyze problems in complex systems. Thus, we will learn to use tools that facilitate the understanding how the structure in an interconnected system create their behavior over time.

Causal loop diagrams help to elicit system elements and their feedback connections in a qualitative model. Formal numerical system dynamics models simulate the system’s behavior over time, allowing to gain a better understanding of the underlying cause and effect structure of the system under investigation. Insight from the modeling exercise help to design more effective policies or redesign the model structure to mitigate current problems. We will use the free VENSIM-Simulator to create qualitative models as well as quantitative simulation models. We will learn to replicate existing models that fit to the identified problems and modify them according to our needs. The system dynamics approach requires rigorous description and documentation of the modeling phases from problem and hypothesis definition, system analysis to policy and implementation in an iterative process that will be input to a term paper.

Organisation:
The seminar hours include introductions to the theory and practice of systems thinking and systems simulation combined with practical exercises and applications on the computer. The acquired knowledge and modeling skills are applied and deepened in the students' own project as part of the term paper.

Examination:
There will be no examination. Students should give short mid-term presentations (5 minutes each), full final presentations
(15 minutes each) and complete a term paper (approx. 15 pages).

Robert Y. Cavana, Brian C. Dangerfield, Oleg V. Pavlov, Michael J. Radzicki, I. David Wheat (Editors), 2021: Feedback Economics - Economic Modeling with System Dynamics. (Contemporary System Thinking), Springer, 1. Edition.

John Morecroft, 2007: Strategic Modelling and Business Dynamics: A Feedback Systems Approach. John Wiley & Sons,
1. Edition.

John D. Sterman, 2000: Business Dynamics – Systems Thinking and Modeling for a Complex World. Mcgraw-Hill Higher Education.

Peter Senge, 2006: The Fifth Discipline – The Art & Practice of the Learning Organisation. Crown Business. 2. Edition.

Peter Senge, 1994: The Fifth Discipline Fieldbook – Strategies and Tools for Building a Learning Organization. Crown Business, 1. Edition.