Showing papers in "Systems Research and Behavioral Science in 1988"

Modeling misperceptions in games

Abstract: In this article, a new method, called improved hypergame analysis, is developed for studying a conflict in which one or more players have misunderstood the true nature of the dispute. The method can be used for analyzing disputes having any finite number of participants consisting of individuals, organizations, nations or any kind of societal group. In order to extend the usefulness of hypergame analysis, the new and comprehensive approach is presented by giving the theoretical definitions, mathematical models, and practical procedures for performing a hypergame stability analysis. Because of the improvements to hypergame analysis, a conflict having misperceptions can be rigorously and accurately modeled and the perceived resolutions to the dispute can be properly ascertained.

The nature of behavior: Control as fact and theory

Abstract: Failure to understand the nature of control has hindered efforts to apply control theory in the behavioral sciences. Control theory was developed to explain the phenomenon of control, which involves the production of consistent results in the face of environmental disturbance. Comparison of a quantitative description of the phenomenon of control with a physical analysis of behavior shows that the events referred to as behavior always involve control. The appearance of behavior as programmed output or response to stimulation is shown to be a consequence of ignoring two fundamental characteristics of control—reference states and disturbance resistance. The recognition of behavior as control requires a new approach to psychological research that emphasizes the discovery of controlled variables. This paper deals with living and non-living systems; the emphasis is on living systems at the individual (organism) level.

Determinants involved in the perception of the necker cube: An application of catastrophe theory

Abstract: The study is concerned with evaluating interactions at the organic level within the visual perception subsystem of living systems. The reported work focuses on the identification of some of the determinants of multistable perception by experimentally testing a nonlinear dynamical systems (catastrophe) model of the Necker Cube. This technique serves as an advantage over linear threshold models which cannot effectively study multivalued functional relationships. It was proposed that manipulation of two independent control parameters (bias or changing shape by continuously varying perspective lines and selective stimulus shading) was compatible with the subjective dichotomy of bistable perception of the Necker cube. One hundred and twenty naive subjects, categorized by age, sex, and optical aids, were presented with a computer-generated sequence of 63 stimuli (7 shading levels X 9 perspective levels) to which they had to respond as to whether they saw a "hollow" or "solid" image. The work revealed that bias and shading exerted their effects in opposition and that each influenced the other. Both were decisive factors involved in the perception of the cube. These findings are supported by topological and psychological evidence.

Problem complexity and the formulation process in planning and design

Abstract: The importance of problem formulation in planning and design is well documented: Errors of the Third Kind (solving the wrong problem or a suboptimal problem) produce underdesign and system failure. This paper explores the role of problem statements in the formulation process. Using Ashby's Law of Requisite Variety as a basis, the quantitative and qualitative features of problem statements are linked to the complexity of a problematic situation. Six propositions are offered for future study.

Is savage's independence axiom a universal rationality principle?

Abstract: Observations of decision making of single human beings have shown the existence of frequent violations of Savage's independence axiom (the Allais and Ellsberg paradoxes). It is suggested that these violations result from the fact that under some situations of choice under uncertainty the independence axiom is necessarily violated by rational decision makers, which prevents them in all cases from including compliance with this axiom as a goal. By considering situations of partial ignorance and defining rational behavior in these situations as respecting both universal principles and rules specific to the particular situation encountered, necessary violations of Savage's axiom by all decision makers are exhibited. Thus the claim to universal observance of this axiom is denied and the explanation of violations by its simply being discarded as a goal is supported.

A comparative analysis of sincere and sophisticated voting under the plurality and approval procedures

Abstract: This article focuses on decision making by voting in systems at the levels of the organization, the community, the society, and the international system. It examines the compatibility of the plurality and approval voting procedures with a number of normative properties commonly used to evaluate the desirability of voting procedures by social choice theorists. This analysis assumes both sincere and sophisticated voting under each procedure and thus extends previous analyses of the same issues which were restricted to sincere voting. We show that neither sophisticated plurality voting nor sophisticated approval voting is compatible with any of the normative properties under examination. This is so despite the fact that the sincere versions of these voting procedures satisfy most of these properties. We relate our findings to other theoretical and empirical examinations of these issues and discuss the possible implications of the violations for actual implementation of these procedures.

Wage determination, income distribution, and the design of change

Abstract: Existing alternative models of economic growth, whether based on neoclassical or Marxist thinking, provide an inadequate basis for designing public policies for evolutionary change in wage and income distribution patterns since these models are local to time and geography-specific historical evidence and do not incorporate mechanisms for a possible change from one pattern to another. Hence, both so-called Market and Marxist systems have issued very interventionist designs for economic development. This paper presents a model of an abstracted living system at the societal level which incorporates mechanisms of wage determination and disbursement of income. The behavior of this model is studied through computer simulation. Two potential modes of production are included in the model: formal and self-employed. However, the system thus represented creates a variety of wage and income distribution patterns. The realization of a specific pattern in this model depends not on assumptions about the initial conditions but on the dynamic interaction of the system variables and the social and legal norms concerning renting, financing of investment and choice of technology by the formal and self-employed sectors of the economy. Using this model, the paper explores entry points for evolutionary change in the wage and income distribution patterns currently existing in the developing countries.

An empirical test of cooperative game solution concepts

Abstract: This article reports the largest empirical test to date of cooperative game solution concepts with observations taken from naturally occurring markets. In contrast to some previous empirical tests of cooperative game solution concepts with observations taken from classrooms, the empirical results support the theory of the core in general and the “equal propensity to disrupty” solution concept in particular. The Shapley value and the nucleolus receive weaker empirical support.

Evolution, systems of interdependence, and social values†

Abstract: Human social behavior is strongly conditioned by the interdependence relationships that actors, be they individuals or groups, share, as well as the outcomes or values they pursue for self and/or for interdependent others. The economist Kenneth Boulding (1978) has recently set forth a theory of human social behavior that considers the role of biological and cultural evolution in the development and functioning of three major systems of human interdependence. The present paper first briefly describes Boulding's theory in terms of his characterization of the evolution of threat, exchange, and integrative systems of relationship. Subsequently, social values are conceptually defined in terms of actors' preferences for differing distributions of resources for self and/or others. An evaluation is made of threat, exchange, and integrative systems, first in terms of the relative dominance of the particular values that are observed within particular interdependence systems, and second in regard to how cultural norms evolve to control the expression of values within each system. Then, the ways in which various social and behavioral scientists have conceptualized the structures and processes of interdependence are summarized. Finally, two examples are used to illustrate the kinds of issues that emerge when one considers the possible relationships that may obtain among evolution, systems of interdependence, and social values.

Strategies for developing general systems theories

Abstract: General systems theories differ from conventional scientific theories in that they have greater unifying power, isomorphism, and heuristic value. To develop general systems theories (living or nonliving system theories) having unifying power, seven strategies are suggested showing how integration of existing theories can be achieved. To achieve isomorphic value, two strategies (the empirico-inductive and rational-deductive approaches) are suggested. To construct a general systems theory having high heuristic value, a strategy involving balance between “openness” and “closedness” of theories is suggested.

Stability and cyclicity in social systems

Abstract: In social systems at the level of the group, the organization, and the society, certain processes approach either a stationary state or a quasicyclic motion. This article examines the phenomenon as follows: first, simple forms of interactions between quantified socioeconomic macrovariables are introduced, including in particular “cooperative” or “antagonistic” interactions. Second, a dynamic model is set up implying these kinds of interactions between its variables. The model can even be solved analytically. Third, all variants of the two-variable model are solved explicitly. According to the choice of type of interaction between the variables, the trajectories either approach fixed points or a quasicyclical motion. The latter case includes trajectories spiraling toward a fixed point or toward a limit cycle. An abstract metamodel is then applied to the dynamics of concrete cases by appropriate concrete interpretations of the variables and their dynamics. Four cases from different sectors of the society are discussed explicitly: political systems (interaction between government and people); relations between partners (the dynamics of competing partner relations); economic long-term cycles (the dynamics of the phases prosperity, recession, depression, recovery); and evolution of firms (for example, the restaurant cycle). Every example corresponds to a certain variant of the metamodel, and the dynamics of the example can be interpreted according to the solution of the metamodel.

Systems simulation. The simulation of social system evolution with spiral loops

Abstract: Social system evolution is taken to be the result of the interaction of autonomous social systems for the purposes of this paper. An autonomous social system is understood to be a multilevel decision-making system which basically uses two types of rules in order to maintain its goals: rule-setting (strategies) and rule-fulfilling (policies). This article gives an introduction to a recently developed methodology which makes it possible to represent rule-setting and rule-fulfilling decision-making processes in social systems with their structural and behavioral differences. This new methodology also allows us to simulate evolutionary processes in social systems based on these two forms of decision making. The new methodology combines the continuous feedback loop concept of system dynamics with intelligent logical loops, which we call spiral loops. The spiral loop concept, which is based on new developments in evolutionary theory and in the field of artificial intelligence, is used to represent the rule-setting strategic decisions which generate qualitative changes and evolution. The continuous feedback loop concept is used to model the rule-fulfilling policy decisions of social systems which can generate quantitative changes in interaction processes. The potential of this new approach is demonstrated with two important social system applications: (1) The “portfolio simulation model” which helps us to explain and to design the evolution of multibusiness firms in duopoly markets; and (2) the “know-how transfer model” which explains the evolution of multinational corporations in less developed countries and which helps to improve the simultaneously ongoing process of know-how transfer.

Distinguishing between measurements and interpretations in public accounting reports

Abstract: When compared to the other modern professions such as medicine, law, and science, the accounting profession is young and, perhaps, yet emerging. Medicine, law, and science clearly distinguish between information collected on concrete systems and various interpretations of that information. The distinction is less clear in accounting. Living systems theory (LST) may be used to distinguish between measurements and interpretations in accounting information. The following specific questions are answered: (1) Why analyze concrete system processes? (2) Do accounting information systems measure concrete system processes? (3) How would LST change accounting information-gathering and reporting procedures? (4) Does the double-entry bookkeeping measurement method converge on an aggregate measurement that is unbiased with reference to the measurement method itself, i.e., unbiased by any interpretive manipulations by the economic actors? (5) Is there a practical means of using measurements of the concrete elements of organizations to monitor organizational processes and, at the same time, is there a practical means of monitoring the degree of interpretive content of financial statements?. In LST terms, accounting information systems are components of internal transducers of higher-level living systems. Therefore, this study concerns living systems at the levels of organizations, communities, societies, and supranational systems.

The organizational security subsystem: Some potentially catastrophic events

Abstract: This article describes a catastrophe theory model of a proposed security subsystem of living systems. It addresses the levels of the organism, organization, and the society. A butterfly catastrophe model is used to describe change among three stable system states: the system is unprotected, the system is protected from outside agencies, the system is protected from both outside invaders and internal disruption. Four control variables govern the process: environmental hostility, externally based protection systems, internal system integrity, and a decider function which utilizes protection and internal resources properly. The general model is explicated for organismic, organizational, and national levels of systems.

Entropy and the prediction of consumer behavior

Abstract: Consumers can be characterized as experiencing varying levels of entropy or disorder. Models of consumer behavior, such as the multiattribute attitude model, generally do not explain much variation in behavior for individuals experiencing high entropy. An entropy explanation about belief-behavior prediction will be offered, and will be shown to be parsimoniously related to individual's life span and social class.

A comparative test of three models for solving “the bargaining problem”

Abstract: Three experiments are reported, each of which attempts a comparative test of three models for solving the bargaining problem: those of Nash (1950), Kalai & Smorodinsky (1975), and Felsenthal and Diskin (1982). Human subjects in two-person bargaining situations were used in each of the experiments. A simple game matrix—named “Send-the-Marines” after a scenario which illustrates its basic structure—was used under several conditions, including those of a known series of trials in which parties could agree in advance concerning their responses and conditions of a single play for which side payments could be negotiated. These two sets of conditions produced quite different patterns of results, with the side-payments-possible condition showing most clearly patterned agreements. A special factor here was the “exchange bonus,” which came into existence with side payments to extend the effective range of possible agreements. Although some of the results are consistent with one or another of the three models tested, none of the models is consistent with all of the results. A particular problem is that the assumed base for bargaining (the “conflict point” or “minimum utility point” of the models) was used by subjects as a base for producing agreements only under limited conditions. A more general model which includes considerations of the prominence of a possible solution, its social efficiency, and evaluations of equity appears better to describe the full results than any of the formal models examined.

An experimental investigation of plural analysis: Estimating the market share of compact disc players in 1990

Abstract: This article describes an experiment on individual forecasting and estimation. It explores how people reconcile results from different models or analysis approaches that estimate the same variable. Seventy-seven subjects were asked to estimate the market share of compact disc players in 1990. The estimates were made (a) intuitively, (b) using a market penetration model, and (c) using a scenario model. Subjects' uncertainty over the estimate was substantial, with a 90% credible interval covering a range of 50% of possible market shares. The average 90% credible intervals did not decrease significantly after the presentation of the market penetration model or the scenario analysis. However, the uncertainty ranges tended to increase with an increase in the degree of discrepancy between the initial estimate and the scenario estimates. No such effect was observed for the market penetration model. Independently of the discrepancy between subjects' estimates and the model estimates, the confidence in subjects' post-model estimates always tended to increase. Subjects had more confidence in the scenario model than in the market penetration model and least confidence in their own initial guesses. When asked to reconcile the different estimates, subjects most often chose the scenario estimate or created a mixture.