A Comprehensive Analytical Approach for Policy Analysis of System Dynamics Models

A Comprehensive Analytical Approach for Policy Analysis of System Dynamics Models
Mohamed Saleh Decision Support Department, Cairo University, Egypt msaleh@idsc.net.eg
Rogelio Oliva Mays Business School, Texas A&M University, USA roliva@tamu.edu
Christian Erik Kampmann Department of Innovation and Organizational Economics, Copenhagen Business School, Denmark cek.ino@cbs.dk
Paal I. Davidsen System Dynamics Group, University of Bergen, Norway davidsen@ifi.uib.no

Saleh M, Oliva R, Kampmann CE, Davidsen PI. 2010.
A comprehensive analytical approach for policy analysis of system dynamics models.
European Journal of Operational Research 203(3): 673-683.

Abstract Formal tools to link system dynamics model's structure to the system modes of behavior have become available recently. In this paper, we aim to expand the use of these tools to perform the model's policy analysis in a more structured and formal way than the exhaustive exploratory approaches used to date. We consider how a policy intervention (a parameter change) affects a particular behavior mode by affecting the gains of particular feedback loops as well as how it affects the presence of that mode in the variable of interest. The paper demonstrates the utility of considering both of these aspects since the analysis provides an assessment of the overall impact of a policy on a variable and explains why the impact occurs in terms of structural changes in the model. Particularly in the context of larger models, this method enables a much more efficient search for leverage policies, by ranking the influence of each model parameter without the need for multiple simulation experiments. Keywords: System dynamics; Linear model analysis; Eigenvalue analysis; Leverage points.

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Last updated September 28, 2017.