Causal Loops

Influence diagrams

Dennis T. Beng Hui, De La Salle

University-Manila
 What are causal loops?
„ Most commonly used tool in the early stages
of system conceptualization.
„ Also called influence diagrams, or directed
graphs.
„ A diagram that shows causal links among
actions, information, and consequences.
„ A positive link increases the value of the link,
while a negative value decreases the value of
the link.

Dennis T. Beng Hui, De La Salle

University-Manila
Guidelines for Causal Loop
Diagrams:
ƒ Refer to the variables in the loop as quantities
that can rise or fall, grow or decline, up or
down. There is no need to know how they
can be quantified.
ƒ Use nouns or noun phrases and not verbs.
The actions are represented in the arrows.
ƒ Be sure that it is clear what it means to say, “
a variable increases (decreases)….”

Dennis T. Beng Hui, De La Salle

University-Manila
Guidelines for Causal Loop
Diagrams:
„ Do not use causal links to mean “ and then
…”
„ Identify the units of the variables as much as
possible. If necessary, invent it.
„ Phrase the variables positively.
„ If a link needs explanation, disaggregate it
and make it a series of links.

Dennis T. Beng Hui, De La Salle

University-Manila
Guidelines for Causal Loop
Diagrams:
„ Do not interpret open loops as feedback
loops.
„ The sign indicates whether the
succeeding variables increase (positive)
or decrease (negative), when the
previous variable increases.
„ Keep diagrams simple to start with.
„ Watch out for unintended effects.

Dennis T. Beng Hui, De La Salle

University-Manila
Guidelines for Causal Loop
Diagrams:
„ Distinguish carefully between actual
values and perceived values.
„ When using a variable such as “actual
values”, look for corresponding “desired
values”.
„ Be clear about the purpose of the
model. Is it top level, strategic, or a
detailed tactical problem?

Dennis T. Beng Hui, De La Salle

University-Manila
Types of Loops

„ Negative feedback loop – if it contains

an odd number of negative causal links
„ Positive feedback loop – if contains an
even number of negative causal links

Dennis T. Beng Hui, De La Salle

University-Manila
Value of Influence Diagrams

„ Simplicity
„ Tool for communication
„ Does not require intimate knowledge of
on the simulation techniques of SD

Dennis T. Beng Hui, De La Salle

University-Manila
What is a good diagram?

„ Have the purpose and target audience

of the diagram been carefully chosen?
„ Are the factors chosen consistent with
the purpose?
„ The objective of SD is policy analysis,
so are the policies clearly shown in the
diagram?

Dennis T. Beng Hui, De La Salle

University-Manila
What is a good diagram?

„ SD aims to produce policies which are robust

against a range of circumstances, so are the
exogenous factors which might present the
system with setbacks or opportunities clearly
identified?
„ Are the variables capable of being easily
explained to the target audience?
„ Are these variables, in principle, capable of
being measured? Can they vary over time?
Dennis T. Beng Hui, De La Salle
University-Manila
What is a good diagram?

„ Does it capture the most significant

insights? Was it drawn after careful
analysis?
„ Can the diagram be drawn on level
lower or higher without losing
conceptual consistency?
„ Is the diagram too complicated that it
may fail to communicate?

Dennis T. Beng Hui, De La Salle

University-Manila
What is a good diagram?

„ Is the diagram neat and tidy with

minimum number of lines crossing?
„ Can feedback loops be clearly seen?
„ Do I understand the diagram myself
before I try to explain it to someone else
or write about it?

Dennis T. Beng Hui, De La Salle

University-Manila
Notations for Causal loop
Diagrams
Physical Flow

Information Transmission
Control Action
Behavior of Nature

Parameter Parameter Flow

D1 Delay in Physical Flow

FORCE
Forces outside the system where the
manager has no control
FORCE
Dennis T. Beng Hui, De La Salle
University-Manila
Reading a Causal Loop

„ Place the signs (+ or -) at the head or

point of the arrow.
Influencing Influenced Variable
Variable

Positive Links

Negative Links

Dennis T. Beng Hui, De La Salle

University-Manila