The source of poor policy: controlling learning drift and premature consensus in human organizations

In: System dynamics review: the journal of the System Dynamics Society, Volume 17, Issue 1, p. 3-32

Abstract

AbstractAs system dynamicists, we spend our days finding and patching up faulty policies, giving surprisingly little thought to the origin of these poor decision rules. And yet, if we understood their origin, we might be able to attack the problem of faulty policy at its source. This article presents a theory of policy formation that is consistent with what is known about evolutionary processes and human psychology. The theory is translated into a computer simulation model, which is used to illuminate several "handles" on policy creation. The handles influence two potential failure modes in policy creation: (1) "learning drift", a process in which people learn unselectively and, hence, learn without improving; and/or (2) "premature consensus", a process in which managers agree on a policy before the "best" one has emerged. Copyright © 2001 John Wiley & Sons, Ltd.