Decision Making in Societal Models

1. Decision Making in Societal Models Wim Smit Smart Business Center HAN University, the Netherlands

2. Contents • Introduction • Short description of the model of Prof. Vester • Experiences with Vester’s societal model • The simulation curriculum • Discussion and some conclusions • References

3. Societal models • Many models exist in the macro- and micro economical world on national and international level. • By the rise of computing power models became more complex. • Also by the rise of gaming software the models are becoming increasingly realistic. • This paper deals with a societal model created by Prof. F. Vester. • At the end I also will mention the COMPRAM methodology created by Dr. D. DeTombe.

4. Short description of Vester’s model • Eight variables of society are considered, viz.: 1) Politics, 2) Ecopolicy, 3) Production, 4) En-vironmental stress, 5) Education, 6) Quality of Life, 7) Growth rate, and 8) Population size. • Four variables can be influenced, viz.: 1) Eco-policy, 2) Production, 3) Education, and 4) the Quality of Life. • In every round action points are given which can be used for investments in the 4 variables which can be influenced.

5. Structure of Vester’s model

6. Quality of Life links

7. The cybernetic certificate • Example of the certificate that is given as total action points is > 80 points:

8. Ecopolicy development

9. Examples of Ecopolicy output (1)

10. Example of Ecopolicy output (2)

11. Example of Ecopolicy output (3)

12. Example of Ecopolicy output (4)

13. Experiences with Vester’s model • It is seen as a nice ‘edutainment’ play by most students. • Students with a Control Science background are quicker in understanding the Vester’s model. • As in reality no general optimal path to a high Quality of Life can be found, clearly more roads lead to Rome.

14. Responses of students (1) • The Vester’s Ecopolicy game is appreciated because of its ‘edutainment’ character. • It invites after some introduction self-learning in a strong way and stimulates competition among the students. • Control Science students are the best and the quickest in finding reasonable solutions, followed by students in Business Administration.

15. The simulation curriculum (1) • Consists of a module on simulation and one on decision making. • The following steps for the simulation module can be discerned: 1) defining the problem in a concise way, 2) define those variables which characterize the problem in a suitable way, 3) determine the relationships between the variables and chose the control variables, 4) the mathematical model is set up, 5) translate the mathematical model into a simulation model, 6) compare computed results with reality, and 7) perform simulations for the problem solution.

16. The simulation curriculum (2) • For the Decision Making Support System the following phases are discerned: 1) the issue raising phase, 2) the mental model formation process phase, 3) the creation of the mathematical model, 4) the creation of the simulation model, and 5) the creation of the Decision Support System (DSS). • Making a report with the main conclusions and recommendations. And, if desired some training of the users of the models.

17. Discussion and some conclusions (1) • With the present fast and big computers bigger societal models can be simulated far easier. • Also the modern simulation languages can contribute to better models. • Vester’s model is a very good introduction in societal modeling. At least the model shows that decision making is not an easy task in these models.

18. Discussion and some conclusions (2) • Societal models will develop through gaming theory into edutainment games, which will satisfy the homo ludens more. • A Control Theory background stimulates the speed of insight in societal models. • Simulation and Decision Making can be easily combined in one curriculum. • In the paper I have discussed some other business models and methods which stimulated students to consider starting an own business.

19. References (1) • Vester published a lot of readable material in his life and he became even a member of the club of Rome. He was heavily involved in promoting environmental issues. Most of his books he wrote in the German language. • Reading the COMPRAM literature of Dorien DeTombe I can recommend. With this method a lot of societal problems have been attacked in the mean time.

20. References (2) • It is worthwhile to read again the original work of Forester and Meadows et al of the MIT from the 60’s and 70’s of the past century. • Especially their descriptions in the so-called ‘stable’ World Model II are very relevant for our days. One scenario calculated in the 70’s of the last century looks rather good compared with the present day reality.