MIKE-B &MIKE-E 2nd semester
Spring 2010


Module 6 (MIKE-E): Analysis and simulation of complex systems (5 ECTS)


Lecturer
Esben Sloth Andersen (ESA), esa@business.aau.dk

Objectives and contents
The course treats mathematical and statistical methods and simulation tools for the study of complex system dynamics. The main aim of the course is to teach competences in treating complex systems. On the basis of two examples (a simple population dynamics on an island and lock-ins due to externalities), the course will move step by step to more complex systems and discuss the tools that are necessary and available to treat these systems. The methods and tools that are presented in the course are mainly applied in evolutionary economics so far. However, they are applicable to a much wider range of problems. Therefore, the course focuses on teaching competences and knowledge about how and when to use them. 

Teaching methods
The teaching is based on an active and goal-directed participation of the students. Mathematical and methodological competences cannot be learnt passively. Therefore, the course consists of a mixture between lectures and exercises that are conducted by the students and discussed in advanced tutorials.

Project report
Each group has to write a small project report on a topic related to the exercise conducted for one of the tutorials.

The report should start with a short introduction about what is done, why it is done, how this compares to the literature, and how the rest of the report is structured. Then the model should be described. If empirical data is used, this should be shortly described next. Then the analysis conducted should be described. Finally, the results should be presented and discussed. A short conclusion should be found at the end of the report, including the main findings and some outlook on potential further studies.

Student seminar with presentation and discussion of the preliminary reports is scheduled to April 12 at 10.00-12.00, Fib4 room 17b. Submission of preliminary reports by email to all students and Esben Sloth Andersen: April 9, 12.00.

The final report should be submitted at the secretariat in 3 paper copies and by email to Esben Sloth Andersen: April 15, 12.00.


Learning outcomes
Upon successful completion of the course, the student will be able to:

  • Formulate and analyse simple dynamical models in general
  • Formulate and analyse simple dynamical models with an evolutionary mechanism
  • Translate dynamical models for computer simulation
  • Perform simple mathematical and statistical analysis of the results
  • Criticise and extend the simple dynamical models


Exam
The course exam is an oral internal examination covering the curriculum for the course. The examination takes its point of departure in an oral presentation and an ensuing discussion of the written report. The grading is given according to the Danish 7-point marking scale. The examination weights 5 ECTS.

Evaluation criteria
The grade “12” is given for an excellent performance displaying a high level of command of all aspects of the relevant material, with no or only a few minor weaknesses.

Literature and tools
The simulation platform used in the course is the Laboratory for Simulation Development (Lsd). It is for Windows and Unix/Linux systems and can be downloaded and installed from:

http://www.business.aau.dk/lsd/lsd.html


The compendium for lectures, tutorials, and reports will include:

  1. Andersen, E.S. (2004), Population thinking, Price's equation and the analysis of economic evolution, Evolutionary and Institutional Economics Review, 1: 127-148.
  2. Andersen, E.S. (2007), Deterministic and Stochastic System Dynamics, Slides for the MIKE-DE Course.
  3. Arthur, W.B. (1989), Competing technologies, increasing returns, and lock-in by historical events, Economic Journal, 99: 116-131.
  4. Kwasnicki, W. (1999), Evolutionary Economics and Simulation, in T. Brenner (ed.): Computational Techniques for Modelling Learning in Economics, Boston: Kluwer.
  5. Nowak, M.A. (2006), Evolutionary Dynamics: Exploring the Equations of Life, Cambridge, Mass.: Harvard University Press, pp. 45-91.
  6. Valente, M. (2003a), Computer sciences for economists: Slides introducing the Laboratory for Simulation Development (Lsd).
  7. Valente, M. (2003b), Brian Arthur's network externalities model + The fashion waves model.
  8. Valente, M. (2004), Using Lsd for simulations in social sciences: The Lsd Manual.
  9. Witt, U. (1997), ‘Lock-in’ vs. ‘Critical Masses’ – Industrial Change under Network Externalities, International Journal of Industrial Organization, 15, 753-773. (AUB online, DADS database)


Schedule of lectures and seminars

6E-1: March 12, 10.00-12.00, Fib4, room 17B (ESA)
Lecture 1 on the dynamics of games

6E-2: March 17, 13.00-15.00, Fib4, room 17B (ESA)
Lecture 2 on the formal analysis of deterministic and stochastic dynamical systems
 
6E-3: March 19, 10.00-12.00, Fib4, room 15 IT-room (ESA)
Tutorial 1 in the computer lab on the use of a simulation tool (the Lsd system) for exploring and analysing complex dynamics

6E-4: March 24, 12.00-16.00, Fib4, room 17b (ESA)
Lecture 3 on the use of simulation models to analyse stochastic dynamics and empirical studies

6E-5: March 25, 10.00-12.00, Fib4, room 15 IT-room (ESA)
Tutorial 2 in the computer lab on the use of Lsd for exploring the Arthur model 

6E-6: April 6, 10.00-12.00, Fib4, room 15 IT-room (ESA)
Tutorial 3 on the Arthur model of competing technologies, and other exercises 

6E-7: April 12, 10.00-12.00, Fib4, room 17B
Seminar on the preliminary versions of the student reports.