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Analysis of dynamic models by optimization

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  • Erling Moxnes
  • Sergey Naumov

Abstract

Decision‐makers use system dynamics models to understand how model structure causes problematic behaviors, and how the structure should be changed to improve performance. However, understanding problem behavior and designing policies can be complicated without analytical tools. Existing methods focus on feedback loops that drive dynamic behavior. We propose a new method, Analysis of Dynamic Models by Optimization (ADMO), which focuses on understanding the causes of well‐defined problems and on guiding system and policy design. Unlike existing methods, ADMO can evaluate the influence of exogenous variables and nonlinearities, leading to new understandings of endogenous behavior and providing insights for policy design. ADMO can be employed with any model, including differential equation, agent‐based, discrete event, or hybrid, requiring minimal effort. Two cases demonstrate the application of ADMO to analyze problems and improve both system design and policies. © 2023 The Authors. System Dynamics Review published by John Wiley & Sons Ltd on behalf of System Dynamics Society.

Suggested Citation

  • Erling Moxnes & Sergey Naumov, 2024. "Analysis of dynamic models by optimization," System Dynamics Review, System Dynamics Society, vol. 40(1), January.
    • Handle: RePEc:bla:sysdyn:v:40:y:2024:i:1:n:e1747
    DOI: 10.1002/sdr.1747
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    References listed on IDEAS

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    1. John H. Miller, 1998. "Active Nonlinear Tests (ANTs) of Complex Simulation Models," Management Science, INFORMS, vol. 44(6), pages 820-830, June.
    2. Sergey Naumov & Rogelio Oliva, 2018. "Refinements on eigenvalue elasticity analysis: interpretation of parameter elasticities," System Dynamics Review, System Dynamics Society, vol. 34(3), pages 426-437, June.
    3. Rogelio Oliva, 2016. "Structural dominance analysis of large and stochastic models," System Dynamics Review, System Dynamics Society, vol. 32(1), pages 26-51, January.
    4. Moxnes, Erling, 2003. "Uncertain measurements of renewable resources: approximations, harvesting policies and value of accuracy," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 85-108, January.
    5. Rogelio Oliva, 2020. "On structural dominance analysis," System Dynamics Review, System Dynamics Society, vol. 36(1), pages 8-28, January.
    6. William Schoenberg & Pål Davidsen & Robert Eberlein, 2020. "Understanding model behavior using the Loops that Matter method," System Dynamics Review, System Dynamics Society, vol. 36(2), pages 158-190, April.
    7. Saleh, Mohamed & Oliva, Rogelio & Kampmann, Christian Erik & Davidsen, Pål I., 2010. "A comprehensive analytical approach for policy analysis of system dynamics models," European Journal of Operational Research, Elsevier, vol. 203(3), pages 673-683, June.
    8. John Sterman, 2011. "Communicating climate change risks in a skeptical world," Climatic Change, Springer, vol. 108(4), pages 811-826, October.
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    Cited by:

    1. Naumov, Sergey & Oliva, Rogelio, 2025. "Structural feedback and behavioral decision making in queuing systems: A hybrid simulation framework," European Journal of Operational Research, Elsevier, vol. 324(3), pages 855-870.

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