Utility Perception in System Dynamics Models

The utility perceived by individuals is believed to be different from the utility experienced by that individual. System dynamicists implicitly categorize this phenomenon as a form of bounded rationality, and traditionally employ an exponential smoothing function to capture it. We challenge this generalization by testing it against an alternative formulation of utility perception that is suggested by modern theories of behavioral sciences. In particular, the traditional smoothing formulation is compared with the peak–end rule in a simple theoretical model as well as in a medium-size model of electronic health records implementation. Experimentation with the models reveals that the way in which utility perception is formulated is important, and is likely to affect behavior and policy implications of system dynamics models

A Literature Review of Hybrid System Dynamics and Agent-Based Modeling in a Produced Water Management Context

This paper explores the possibility and plausibility of developing a hybrid simulation method combining agent-based (AB) and system dynamics (SD) modeling to address the case study of produced water management (PWM). In southeastern New Mexico, the oil and gas industry generates large volumes of produced water, while at the same time, freshwater resources are scarce. Single-method models are unable to capture the dynamic impacts of PWM on the water budget at both the local and regional levels, hence the need for a more complex hybrid approach. We used the literature, information characterizing produced water in New Mexico, and our preliminary interviews with subject matter experts to develop this framework. We then conducted a systematic literature review to summarize state-of-the-art of hybrid modeling methodologies and techniques. Our research revealed that there is a small but growing volume of hybrid modeling research that could provide some foundational support for modelers interested in hybrid modeling approaches for complex natural resource management issues. We categorized these efforts into four classes based on their approaches to hybrid modeling. It appears that, among these classes, PWM requires the most sophisticated approach, indicating that PWM modelers will need to face serious challenges and break new ground in this realm

Conceptual Framework for Modeling Dynamic Complexities in Produced Water Management

This research addresses a gap in the produced water management (PWM) literature by providing a conceptual framework to describe the connections of PWM to regional water budgets. We use southeastern New Mexico as a case study, because the region is facing looming shortfalls in water availability, and oil and gas production generate high volumes of produced water in the region. The framework was developed through expert interviews, analysis of industry data, and information gained at industry meetings; it is supported by detailed descriptions of material flows, information flows, and PWM decisions. Produced water management decisions may be connected to regional water budgets through dynamic complexities; however, modeling efforts exploring PWM often do not capture this complexity. Instead, PWM is most often based on the least expensive management and disposal alternatives, without considering short and long-term impacts to the regional water budget. On the other hand, regional water budgets do not include treated produced water as a potential resource, thus missing opportunities for exploring the impact of potential beneficial reuse. This is particularly important when there is a need to address water shortages in chronically water-short regions of the United States. At the same time, oil and gas production in the western United States is challenged by the need to dispose of large volumes of produced water. The framework is useful for developing improved models of PWM to identify the impact of alternative management decisions on regional water budgets