Why Models are Wrong and still Useful!

Reflections from the Q&A session at INSEE conference presentation on system dynamics and on occasion of completion of 1 year of system dynamics work at TERI.


We always use models. Sometime we know that we are using them while most of the time we are not aware about it. Here is an example. When you go to buy something for a friend or family member how do you make a decision on what to buy? Suppose I go to a shop to buy a shirt for my father, I create a mental image of him in my mind. It is a model. I use it to see if the shirt will suit him. I am now creating simulations. Based on the results of my mental simulations I take a decision of either to buy the product or not. Is my mental model right? No. It is a reflection of reality. My image of my father is a partial reflection about him. But it is still useful. I cannot do away with it. Does that effect my decision? Yes. At times when I am not sure about how the shirt will look on my father, I ask the shop keeper if he would exchange it. On other days, I would shortlist the shirt and say I will come back with my father. What is happening here? I don’t have enough confidence on my mental model. But I am still using it to make a decision. It all depends on what model we have the highest confidence upon. We use them all the time. Even better, I would prefer to have my sister, mother or wife with me to make the decision of buying the shirt. I would consult them. I would want them to use their Mental Model and share their simulation findings with me. I am testing and validating my model. Does this make my model right? No. But it helps improve my understanding of my model. It helps me to make an informed decision. I use my mental model and other’s models to arrive at a conclusion. At times it works, at times it does not. My father may not like the shirt, or he may like it or we may not like it as much as we thought we would. But does that mean that we don’t use our mental model and simulation for making a decision? No. We all use models all the time, Knowingly or unknowingly.

The real question to be asked is whether we are aware of the fact that we do so. Do we have easy access to the assumptions which go in creation of our mental models? Do we communicate them well to others while making a decision or a policy? What tools can help us elicit our assumptions and create a schema of our mental model so that we can share it with others and so do they?

I believe the answer to the above questions is the use of system dynamics. It is a tool which can help us improve our understanding of our mental models and open it up for others to review and improve. This in turn improves our understanding of the system we are dealing with for effective decision making and policy planning.

Does this mean that we shall find solution to all the problems? No. Does this mean that our model shall be right? No.

But it would allow us to test our assumptions and improve our decision making process. Simulations also give us the power to understand the unintended consequences of our actions. At the end it can improve our confidence levels on the model which we shall use to make decisions.

Further reading on Models and System Dynamics: