Strategic Modelling and Business Dynamics: A Feedback Systems Approach

Chapter 10. Model Validity, Mental Models and Learning

• Mental Models, Transitional Objects and Formal Models

• Models of Business and Social Systems

• Tests for Building Confidence in Models

• Model Confidence Building Tests in Action: A Case Study in Fast-moving Consumer Goods

• Model Structure Tests and the Soap Industry Model

• Equation Formulation Tests and the Soap Industry Model

• Tests of Learning from Simulation

• Summary of Confidence Building Tests

• Conclusion – Model Fidelity and Usefulness

In an episode of a popular television programme called Changing Places a computer gaming enthusiast, who had clocked-up hundreds of simulated hours on a PlayStation driving imaginary high performance cars, was invited to drive a real racing car around Silverstone (a major race circuit in England, home of the British Grand Prix and the birthplace of Formula 1). The experience was sobering. He spun off. Even when he stayed on the track he failed to achieve competitive lap times.

This story is quite revealing about the purpose, limitations and use of models and simulators. A common view is that models are representations of reality intended to be useful to someone charged with managing and participating in that reality.^[] In this case reality has a well-defined meaning (the real racing car on the track at Silverstone) and it is clear that the computer model falls short of reality in some important ways. The natural temptation for the model user is to demand a better model – one that represents a racing car ...