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Facult des Sciences Sociales Faculty of Social Sciences

20/12/05
Eco 6108/SYS 5140 Economic Systems Design


Professor: P. Crabb Winter 2006
ph: 562-5800 x 1430 Webct intramail address: Philippe Crabb
Office address: 355, King Edward, R 034 Office hours: Monday, 2: 45 to 4: 00 p.m.
Class room: MRT 252 and Wednesday, 1: 30 to 2: 45 p m.
or by appointment

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For some people, when you say Timbuktu it is like the end of the world, but that is not
true. I am from Timbuktu, and I can tell you we are right at the heart of the world (Ali
Farka Toure quoted in M.C. Jackson, 2000).

the more urgent is the need of an universal organizational science In fact, it was
necessary to transform the world of experience, whatever it might be in reality, in an
organized whole (Alexander Bogdanov)

The whole is more than the sum of the parts. The part is more than a fraction of the whole
(Aristotle).

Dealing with the issues and problems of this [course] requires conceptual and general
thinking ability rather than knowledge of quantitative methods or specific analytical
techniques (J.P. Van Gigch).

...Common to all studies of complexity are systems with multiple elements adapting or
reacting to the pattern these elements create...The patterns that are in the process of
being formed are too complicated to be worked out analytically...But with the computer,
we can get insight into the formation of patterns by directly simulating them - computing
them and observing them as they form. (B. Arthur)

The course will be an introduction to systems thinking with a special emphasis on complex
systems, environmental and socio-economic systems.
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Herbert Simon,
1978 Nobel Prize in
Economics for, amongst
others, his work on
Artificial Intelligence
(Died February 2001;
The Economist, Feb 22,
2001)









Kenneth Boulding,
Professor of Economics,
One of the co-founders of
General Systems Theory
(1910 - 1993)











Ludwig Von Bertalanffy,
Pioneer of the
Systems Approach,
Department of Biology,
University of Ottawa, 1954
(1901-1972)
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from: http://www.necsi.org/projects/mclemens/cs_char.gif


The course credit will be allocated in the following way:

S 30 % for a term-paper using a simulation software and written collectively by small groups of
about three students coming from different disciplines (if feasible), due with the final exam. The
topic of your choice (a wicked problem) must be selected and communicated to me through
Webct intramail by Tuesday, March 7. The message should contain the title and a 10 lines
description of the proposal with at least one bibliographical (or Web) reference and an indication of
the data and the software to be used. You may use material from the suggested readings. I reserve
myself the right to refuse the chosen topic if I deem it not appropriate. The paper should also
contain a critical evaluation of the software you are using


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S 30 % for a (closed book) mid-term test on your knowledge of the material of the 6 first lectures
and required readings to be taken on Tuesday February 28.

S 30% for the (open book) final exam: class material + required readings.

S 10% for Web discussion forum participation (may include suggested readings) evaluated on the
basis of both frequency and quality. This portion of the mark clearly reflects my own subjective
assessment!

The web address for the course is maestro.uottawa.ca. Type your student number and Infoweb
password (you may obtain it on- line), and then the course SYS 5140".

There is no textbook for this course. Some required readings are bound in class notes format and
available at Reprography, basement of Morisset Library.

Good optional reference books are:

Yaneer Bar-Yam, Making Things Work, Knowledge Press 2004
Covers some of the same material as Dynamic Complex Systems by the same author but at a much
more elementary level. Contains several case - studies.

M.C. Jackson, Systems Thinking: Creative Holism for Managers, Wiley 2003.
Excellent overview of the whole field with special emphasis on human organizations (on reserve at
Morrisset Library ).

G. Midgley, Systems Thinking, 4 vol., Sage 2003 (on reserve at Morrisset Library)
Contains reprints of classical articles on systems.


Lecture 1 - 2: Overview and Systems Thinking Methodology


Case-study

Suggested readings: 1) Ahl, V. and T.F. Allen, Hierarchy Theory, 1996.
2) Simon, H., The Architecture of Complexity, in C.
Midgley, op. cit., vol 1





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Lecture 3: Introduction to Complex Systems

Required readings: 1) http://www.pscs.umich.edu/complexity.html
2) http://www.necsi.org/guide/examples/hiv.html
3) Rotmans, J., J. Grin, J. Schot and R. Smits, Transition
and System Innovations, ICIS, Maastricht, 2003
4) http://www.irit.fr/COSI
click on Introductory Tutorial on Complexity in
Social Science
5) Bar-Yam, Dynamic Complex Systems, c. 0;
http://www.necsi.org/publications/dcs/DCSchapter0.pdf
6) http://www.calresco.org/setting.htm


Suggested readings: 1) Sterman, Business Dynamics, Irwin- McGraw-Hill, 2000,
c.1
2) Taylor, M.C., Moment of Complexity, University of
Chicago Press 2001 (rather Humanities-oriented)
3) Johnson, S., Emergence, Scribner 2001
4) Laszlo, E., Macroshift, Berrett-Koehl 2001



Lecture 4: Introduction to the Mathematics of Complex Systems (38 p.)

Required reading: Bar-Yam, c.1, p. 1-38.
http://www.necsi.org/publications/dcs/Bar-YamSect1.1-1.2.pdf

Suggested reading: W.H. Stieb, The Non- linear Workbook, 2
nd
ed.World
Scientific 2002.



Lecture 5: Introduction to Computational Complex Adaptive Systems: Genetic
Algorithms and Neuronal Networks

5.1 Genetic Algorithms
5.2 Neuronal Networks

Required readings: 1) Mitchell, M., An Introduction to Genetic Algorithms,
MIT Press 1996, c. 1, 34 p., Library e-book
2) Bar-Yam, c.2, p. to be assigned
http://www.necsi.org/publications/dcs/Bar-YamChap2.pdf



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Suggested readings: 1) Axelrod, R., The Complexity of Cooperation, Princeton
University Press 1997.
2) Melin, P. and O.Castillo, Modelling Simulation and
Control of Non- linear Dynamic Systems, Taylor and
Francis, 2002.
3) Luna, F.and B. Stefanson, Economic Simulations in
Swarm: Agent-based Modelling and Object Oriented
Programming, Kluwer 2000

URL:1) www.iseesystems.com , Links to Other System
Thinking Resources
2) www.santafe.edu
3) www.iiasa.ac.at
4) www.cscs.umich.edu
5) www.new-paradigm.co.uk

Lecture 6: Systems Dynamics; the Simulation of Complex Systems (60 p.)

Lab session

Required readings: 1) Hannon, B. and P. Ruth, Dyanmic Modeling, , 2
nd
ed., c. 3
Gradual Development of a Dynamic Model, p.32 45.
2) Senge, P., The leaders New Work: Building
Learning Orgaizations, in G. Midgley, op.cit., vol. 3, p. 304-
327

Suggested readings: 1) Forrester, J.W., Counterintuitive Behavior of Social Systems
in G. Midgley, Systems Thinking, Vol. 2, Sage 2003.
2) D.H. Meadows, D.L. Meadows, and J, Randers, Beyond the
Limits, in G. Midgley, op.cit., Vol. 2
3) http://www.irit.fr/COSI/training/

Suggested Systems Dynamics Softwares:

1) Stella

Based on the proprietary Stella software (www.iseesystems.com)
Click on Whats New, Stella 7",
Stella Demo, How it works, Overview of the Stella
Environment, Overview of the Stella Language and download
the Stella Demo.



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Suggested readings:

B. Hannon and M. Ruth, Dynamic Modeling, 2
nd
ed., Springer Verlag 2001. The book
comes with a run-time CD-ROM version of Stella for both Mac and Windows (either
for Mac or IBM), Part I
M. L. Deaton and J. I. Winebrake, Dynamic Modeling of Environmental Systems,
Springer Verlag, 2000. The book comes with a run-time CD-ROM version of Stella for
both Mac and Windows (either for Mac or IBM), c.1 and 2, p. 1 65.

M. Ruth and B. Hannon, Modelling Dynamic Economic Systems, Springer Verlag 1997
and B. Hannon asnd M. Ruth, Modelling Dynamic Biological Systems, Springer
Verlag 1997 (intermediate). Both books come with a run-time CD-ROM version of
Stella 5 for both Mac and Windows (either for Mac or IBM). Both are on reserve.

2) Vensim (www.vensim.com):

Suggested readings :

A. Ford, Modeling the Environment, Island Press 1999. The book introduces the reader
to Stella but also to other similar softwares such as Vensim.

J. D. Sterman, Business Dynamics, Irwin McGraw-Hill, 2000. The book introduces the
reader to softwares similar to Stella such as Vensim, proprietary Ithink (very
similar to Stella;

Senge.P.M., The Fifth Discipline; the Art and Practice of the Learning Organization,
Currency Doubleday, 1990. HD 58.9.S46 1990.


Mid-Term Examination: Tuesday February 28

Lecture7: Thermodynamic Systems (60 p.)

Required readings: 1) Bar-Yam, c. 1,1.3, p. 58 - 95.
http://www.necsi.org/publications/dcs/Bar-YamChap1.pdf
2) Prigogine, I., P.M. Allen and R. Herman, Long
Term Trends and the Evolution of Complexity, p.1-
60 in E.Laszlo and J. Bierman, Goals in a Global
Community, Pergamon Press 1977.
CB430.G631977 v.1.

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Lecture 8: Coupled Environmental-Human Systems (60 p.)

Required readings: 1) Holling, C.S. and L. Gunderson, Resilience and
Adaptive Cycles, c. 2 in L. H. Gunderson and C.S.
Holling, Panarchy: Understanding Transformations
in Human and Natural Systems, Island Press 2002 ,
p. 25-61.
2) Scheffer, M.S. et al., Catastrophic Shifts in
Ecosystems, Nature, 413, October 2001, p. 591-6.
3) Jos A.. Rial, Rogera. Pielke sr. , Martin Beniston,
Martin Claussen, Josep Canadell, Peter Cox,
Hermann Held, Nathalie de Noblet-Ducoudr,
Ronald Prinn, James F. Reynolds and Jos D. Salas,
Nonlinearities, feedbacks and critical thresholds
within the earths climate system, Climatic Change
65: 1138, 2004.


Lecture 9: Complex Economic and Urban systems (115 p.)

Required readings: 1) Arthur, W.B., Increasing Returns and Path
Dependence in the Economy, University of
Michigan Press 1994, c.1 Positive Feedbacks in
the Economy, p. 1-12, c.7 Urban Systems and
Historical Path-Dependence, p. 99-110.
2) Arthur, W.B., S.N. Durlauf, D.A. Lane, The
Economy as an Evolving Complex Systems,
Addison-Wesley 1997, Introduction, D. Lane et al,
Foresight , Complexity and Strategy, P. Krugman,
How the Economy organizes itself in space, 1-13,
169-198, 239-262.
3) Brock, W.A., Karl-Gran Maler and C.
Perrings, c. 10 Resilience and Sustainability:
Analysis of Non- linear Dynamic Economic
Systems. In Gunderson and Holling, 261 - 288.




Suggested readings: 1) Waldrop, M., Complexity: the emergent
science at the edge of order and chaos, ,
Schuster 1993, Q175 w258 (Carleton)
2) Gleick, J., Chaos, Making a New Science,
Penguin1987.

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3) Kaufman, S. At Home in the Universe:
the Search For Laws of Self-
Organization, Oxford University Press,
1995, c.2-8.


Lecture 10: Soft Systems Methodology and Systems Practices (90 p.)

Required readings: 1) Checkland , P, Soft Systems Methodology: a Thirty
Years Retrospective, Wiley 1999, c.7 The Systems
Methodology in Action (start reading from section
General Outcomes from the Action Research),
P 213 -.242.
2) Wilson, K. and G.E.B. Morren, Systems
Approaches for Improvement in Agriculture and
Resource Management, McMillan 1990 (out of
print), case 1 Chatham River, p. 309-26.


Lecture 11 - 12: Complex Innovation Systems (202 p.)

Required readings: 1) Rip, A. and R.. Kemp, Technological Change,
in S. Rayner and E. Malone, Human Choice
and Climate Change, Battelle Press 1998,
vol. 2, 327-92.
2) Morck, R. and B. Yeung, The Economic
Determinants of Innovation, Industry Canada,
2001
http://dsp-psd.pwgsc.gc.ca/Collection/C21-23- 25-
2000E.pdf#search=the%20economic%20determinants%20of%20innovation
3) Carlisle, Y. and E. McMillan,, Innovation in
Organizations from a Complex Adaptive
Systems Perspective
www.liv.ac.uk/ccr/2005_conf/subject_areas/mngt_files/papers/InnovationInOrganisationsEtc.pdf
4) Katz, J.S., Indicators for Complex Innovation
Systems, 2005
http://econpapers.repec.org/paper/srussewps/134.htm
5) Ethiraj, S. and D. Levinthal, Modularity
and Innovation in Complex Systems, 2003.
http://ideas.repec.org/p/ssa/lemwps/2003-15.html





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6) Douthwaite, B. et al., Blending Hard and
Soft Science: the Follow-the-Technology
Approach to Catalyzing and Evaluating
Technology Change,
http://www.ecologyandsociety.org/vol5/iss2/art13/index.html

Suggested readings: 1) Freeman, C. and L. Soete, The Economics of
Industrial Innovation , 3
rd
ed., MIT Press 1999,
Part 2, HC 79 .T4 F73 (2nd ed.),291-365.
2) Dosi, G. Sources, Procedures, and
Microeconomic Effects of Innovation, Journal of
Economic Literature, Vol 26 (1988), 1120-1230.
3) Rosenberg, N. and L.E. Birdzell, How the West
Grew Rich, Basic Books, 1986, HC 240 R67
4) Scherer, F. M., New Perspectives on Economic
Growth and Technological Innovation,
Brookings Institution, 1999, HD 78 S34
5) Aghion, P. and P. Howitt, Endogenous Growth
Theory, MIT Press 1998, Carleton, HD45.A47
6) Nelson, R.R., The Sources of Economic
Growth, Harvard University Press 1996.
6) Parayil, G. Conceptualizing Technological
Change Rowman
7) Kleindl, B.A. Electronic Marketing: Managing
E-Business, South Western College Publishing,
2000.
7) Shapiro, Carl and Varian, Hal R., Information
Rules; a Strategic Guide to the Network
Economy, Boston, Mass., Harvard Business
School Press. 1998 352 p., Carleton,
HC79.I55S53


Lecture 13: History of Systems and Complex Systems Thinking

Suggested readings: 1) Jackson, M. Systems Approaches to Management, Kluwer,
2,000, c. 4 Origins in the Disciplines, 43-89.
2) Midgley, G., Systems Thinking: An Introduction and
Overview, in Systems Thinking, Vol. 1, Sage, 2003, p. xvii-
xLix..
3) Gare, A.E., Postmodernism and the Envronmental Crisis,
Routledge, 1995, c.2 Postmodernism and
Poststructuralism (37-42), C.4 Postmodern Metaphysics
(108-132).

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4) Blauberg, I. V., V.N. Sadovsky and E.G. Yudin,
Systems Theory, Progress Publishers 1977,
part I, c.2 and 3, p.42-83. (out of print)
5) Berlin, I. Three Critics of the Enlightenment,
Princeton University Press, 2,000, The
Philosophical Ideas of Giambattista Vico.