The document discusses common modes of dynamic behavior in systems including exponential growth, goal seeking, and oscillation. Exponential growth is characterized by constant doubling time. Goal seeking behavior diminishes in rate of change as the goal is approached. Oscillation occurs when actions to eliminate discrepancies from a goal overshoot and undershoot due to time delays. These behaviors can interact, such as s-shaped growth that initially grows exponentially and then levels off due to constraints, or may overshoot and oscillate due to delays. Other behaviors discussed include equilibrium, randomness, and chaos.

1. Common Modes of
Dynamic Behavior
Business Dynamics
by John Sterman
Dennis T. Beng Hui, De La
Salle University-Manila

2. Exponential Growth
The larger the quantity, the larger the net
increase. Exponential growth has the
remarkable property of a constant
DOUBLING TIME.
Examples: population, money in a
bank.
Dennis T. Beng Hui, De La
Salle University-Manila

3. Exponential Growth
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Dennis T. Beng Hui, De La
Salle University-Manila

4. Goal Seeking
The rate at which the system
approaches its goal diminishes
as the discrepancy falls. We do
not observe a constant rate of
approach that suddenly stops
just as the goal is reach
Dennis T. Beng Hui, De La
Salle University-Manila

5. Goal Seeking
Goal
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Dennis T. Beng Hui, De La
Salle University-Manila

6. Oscillation
It is third fundamental mode of
behavior in system dynamics. The
state of the system is compared to its
goal, and corrective actions are taken
to eliminate discrepancies.
The state of the system constantly
overshoots its goal or equilibrium
state, reverses, then undershoots
and then so on.
The overshooting arises from the
presence of significant La
Dennis T. Beng Hui, De
time delays.
Salle University-Manila

7. Oscillation
VAR Goal
TIME
Dennis T. Beng Hui, De La
Salle University-Manila

8. Interactions of the
Common Modes of
Dynamic Behavior
Dennis T. Beng Hui, De La
Salle University-Manila

9. S-Shaped Growth
Growth is observed to grow
exponentially, the gradually
declines. Eventually, one or
more constraints halt the growth
process.
Dennis T. Beng Hui, De La
Salle University-Manila

10. S-Shaped Growth
Limiting
Constraint
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Dennis T. Beng Hui, De La
Salle University-Manila

11. S-Shaped Growth with
Overshoot
Often, systems with s-shaped
growth contain significant time
delays. These time delays lead
to the possibility of the system
to overshoot and oscillate
around the limiting constraint.
Dennis T. Beng Hui, De La
Salle University-Manila

12. S-Shaped Growth with
Overshoot
Limiting
Constraint
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Dennis T. Beng Hui, De La
Salle University-Manila

13. Overshoot and Collapse
Consumption or erosion of the
limiting constraint happens such
that the system does not reach
equilibrium and the system
collapses.
Dennis T. Beng Hui, De La
Salle University-Manila

14. Overshoot and Collapse
Limiting
Constraint
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TIME
Dennis T. Beng Hui, De La
Salle University-Manila

15. Other Modes of behavior
Statis or equilibrium – change is too slow relative
to your time horizon for it to be meaningful. .
Randomness – this is a measure of ignorance.
When we say random variations, we mean that we
don’t actually know the reasons for these
variations.
Chaos – chaotic systems fluctuate irregularly,
never exactly repeating, even though its motion is
completely deterministic. This irregularity arises
endogenously and is not created by random
shocks.
Dennis T. Beng Hui, De La
Salle University-Manila