Strategic Modelling and Business Dynamics: A Feedback Systems Approach

10.3. Tests for Building Confidence in Models

The fluid nature of models in the social sciences has led system dynamicists (and other social system modellers) to adopt a broad and pragmatic view of model validity as a process of confidence building among those who will use the model (Forrester & Senge, 1980). Confidence building involves a variety of different tests to assess the quality of both the model and the model building process. Here I present three categories of tests that have proven particularly useful in practice: tests of model structure, tests of model behaviour and tests of learning. Other tests are also used, but they are beyond the scope of this book. Readers who wish to know more are referred to the comprehensive treatment of model validation and testing in Sterman (2000, Chapter 21).

• Tests of model structure are intended to assess whether the feedback structure and equation formulations of the model are consistent with the available facts and descriptive knowledge of the real-world system. These tests apply to both the conceptual model and the algebraic model and are very important in system dynamics practice because they draw attention to whether modellers are making effective use of judgemental information for modelling. As Figure 10.3 illustrates, there is a vast amount of relevant data about social systems that resides in the minds of experienced people (their collective mental database). This information about the inner workings of the organisation, its ...