System Dynamics

In the late 1950s, Professor Jay Forrester and others at the Massachusetts Institute of Technology began applying theories of information-feedback from control systems engineering to the study of modern industrial systems. They believed that modeling and simulation could be applied to gain significant insight into the behavior of social systems, just as modeling and simulation has provided insight into the behavior of physical systems within engineering and physics.

System dynamics has since been applied to an array of complex social systems including urban growth & decay, inventory management, project performance, market behavior, crime and punishment, and more. These applications are based on several basic premises. First, information-feedback is integral to the human decision making process. Humans act in response to the environment. These actions alter the environment creating a new basis for future decisions guiding future actions. Second, human judgment cannot always predict the behavior of complex systems. The complexity of markets, businesses, governments, most human activity is such that the unaided human mind cannot follow cause-effect relationships accurately enough to predict behavior. Third, most system behavior is driven, or guided, by the internal structures and policies of the system. People often attribute behavior to external causes when in reality the drivers are the policies and structures within the system. Modeling and simulation help elucidate how a system's policies and feedback structures shape the observed behavior.

Links
System Dynamics Society
MIT System Dynamics Group
Jay W. Forrester
System Dynamics and Energy Modeling