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Why don't well-educated adults understand accumulation? A challenge to researchers, educators, and citizens

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  • Cronin, Matthew A.
  • Gonzalez, Cleotilde
  • Sterman, John D.

Abstract

Accumulation is a fundamental process in dynamic systems: inventory accumulates production less shipments; the national debt accumulates the federal deficit. Effective decision making in such systems requires an understanding of the relationship between stocks and the flows that alter them. However, highly educated people are often unable to infer the behavior of simple stock-flow systems. In a series of experiments we demonstrate that poor understanding of accumulation, termed stock-flow failure, is a fundamental reasoning error. Persistent poor performance is not attributable to an inability to interpret graphs, lack of contextual knowledge, motivation, or cognitive capacity. Rather, stock-flow failure is a robust phenomenon that appears to be rooted in failure to appreciate the most basic principles of accumulation, leading to the use of inappropriate heuristics. We show that many people, including highly educated individuals with strong technical training, use what we term the "correlation heuristic", erroneously assuming that the behavior of a stock matches the pattern of its flows. We discuss the origins of stock-flow failure and implications for management and education.

Suggested Citation

  • Cronin, Matthew A. & Gonzalez, Cleotilde & Sterman, John D., 2009. "Why don't well-educated adults understand accumulation? A challenge to researchers, educators, and citizens," Organizational Behavior and Human Decision Processes, Elsevier, vol. 108(1), pages 116-130, January.
  • Handle: RePEc:eee:jobhdp:v:108:y:2009:i:1:p:116-130
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    References listed on IDEAS

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    1. Roch, Sylvia G. & Lane, John A. S. & Samuelson, Charles D. & Allison, Scott T. & Dent, Jennifer L., 2000. "Cognitive Load and the Equality Heuristic: A Two-Stage Model of Resource Overconsumption in Small Groups," Organizational Behavior and Human Decision Processes, Elsevier, vol. 83(2), pages 185-212, November.
    2. Gonzalez, Cleotilde, 2005. "Decision support for real-time, dynamic decision-making tasks," Organizational Behavior and Human Decision Processes, Elsevier, vol. 96(2), pages 142-154, March.
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    4. Sterman, John & Booth Sweeney, Linda, 2002. "Cloudy Skies: Assessing Public Understanding of Global Warming," Working papers 4361-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Diehl, Ernst & Sterman, John D., 1995. "Effects of Feedback Complexity on Dynamic Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 62(2), pages 198-215, May.
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    9. Sterman, John D., 1989. "Misperceptions of feedback in dynamic decision making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 43(3), pages 301-335, June.
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    Cited by:

    1. Becker, Kai Helge, 2016. "An outlook on behavioural OR – Three tasks, three pitfalls, one definition," European Journal of Operational Research, Elsevier, vol. 249(3), pages 806-815.
    2. repec:gam:jsusta:v:9:y:2017:i:6:p:983-:d:100727 is not listed on IDEAS
    3. Hämäläinen, Raimo P. & Luoma, Jukka & Saarinen, Esa, 2013. "On the importance of behavioral operational research: The case of understanding and communicating about dynamic systems," European Journal of Operational Research, Elsevier, vol. 228(3), pages 623-634.
    4. Radboud J. Duintjer Tebbens & Kimberly M. Thompson, 2009. "Priority Shifting and the Dynamics of Managing Eradicable Infectious Diseases," Management Science, INFORMS, vol. 55(4), pages 650-663, April.
    5. Gogi, Anastasia & Tako, Antuela A. & Robinson, Stewart, 2016. "An experimental investigation into the role of simulation models in generating insights," European Journal of Operational Research, Elsevier, vol. 249(3), pages 931-944.
    6. O'Keefe, Robert M., 2016. "Experimental behavioural research in operational research: What we know and what we might come to know," European Journal of Operational Research, Elsevier, vol. 249(3), pages 899-907.
    7. Boschetti, Fabio & Richert, Claire & Walker, Iain & Price, Jennifer & Dutra, Leo, 2012. "Assessing attitudes and cognitive styles of stakeholders in environmental projects involving computer modelling," Ecological Modelling, Elsevier, vol. 247(C), pages 98-111.
    8. repec:eee:touman:v:54:y:2016:i:c:p:81-95 is not listed on IDEAS
    9. Papachristos, George & Adamides, Emmanuel, 2016. "A retroductive systems-based methodology for socio-technical transitions research," Technological Forecasting and Social Change, Elsevier, vol. 108(C), pages 1-14.
    10. Leopold-Wildburger, Ulrike & Strohhecker, Jürgen, 2017. "Strategy map concepts in a balanced scorecard cockpit improve performanceAuthor-Name: Hu, Bo," European Journal of Operational Research, Elsevier, vol. 258(2), pages 664-676.
    11. repec:eee:wdevel:v:107:y:2018:i:c:p:40-53 is not listed on IDEAS
    12. Vancouver, Jeffrey B. & Weinhardt, Justin M. & Vigo, Ronaldo, 2014. "Change one can believe in: Adding learning to computational models of self-regulation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 124(1), pages 56-74.
    13. Strohhecker, Jürgen & Größler, Andreas, 2013. "Do personal traits influence inventory management performance?—The case of intelligence, personality, interest and knowledge," International Journal of Production Economics, Elsevier, vol. 142(1), pages 37-50.
    14. Arango, Santiago & Moxnes, Erling, 2012. "Commodity cycles, a function of market complexity? Extending the cobweb experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 321-334.
    15. Schaffernicht, Martin & Groesser, Stefan N., 2011. "A comprehensive method for comparing mental models of dynamic systems," European Journal of Operational Research, Elsevier, vol. 210(1), pages 57-67, April.
    16. Luoma, Jukka, 2016. "Model-based organizational decision making: A behavioral lens," European Journal of Operational Research, Elsevier, vol. 249(3), pages 816-826.

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