Causal Maps

As discussed in the previous posting, we determine the stability of a causal loop by offsetting plus and minus segments in the loop. A Causal Map is a hierarchy of interacting, interlocking causal loops. A map represents the overall model. An important question for such a model is will it reach equilibrium based on the nature of casual loops within it.

There are several strategies for determining the stability of a map that can be generalized into two categories: 1). Loops within a map are of unequal importance; 2.) Loops are of equal importance.

If loops are of unequal importance, one strategy for predicting equilibrium is to assume the fate of system is determined by most important loop. An issue arises that the judgment of loop importance may be arbitrary. We can address this with knowledge of the process being modeled to argue about the most important inner dynamic.

On the other hand, we can also neutrally look at which loop has the most variables of interest and asssume such a loop is most important. The greater the number of inputs to and outputs from a variable, the greater its importance. The loop with the greatest number of important variables is the most important loop. This is also known as the degree of the system.

In the example of urbanization that was modeled in the previous posting, variables P, M, S all have more than one output, as do variables P, D, B. So P,M,S,D,B are most important variables. We look for the loop that contains greatest number of these: P-M-S-B-D-P is that loop.

Causal Loop P-M-S-B-D-P has an even number of negative signs so it is deviation amplifying. We would conclude the system represented by the entire Causal Map is unstable, using this strategy. It will eventually destroy itself if something is not dramatically changed.

Now let’s assume a different strategy category for P-M-S-B-D-P –that the loops are of equal importance. To predict system stability, count the number of negative loops. If this is an even number, then the system is deviation amplifying, if odd then stable. In the urbanization case, we have one of the four loops negative, P-G-B-D-P. If the relationships are of equal importance, in our example the result is a stable system. The system will ultimately reach an equilibrium.

Another tactic for a strategy that assumes the causal loops in a map are of equal importance is to count the number of negative relationships between variables, making sure to count a relationship more than once if is in multiple loops. Relational algebras can be developed for such calculations for maps of any size.

It’s possible both strategy categories are applicable to a map, albeit at different times. Urbanization, in our example, may be stable for some period of time when all causal relationships are more or less equal in effect on overall system. Imbalances can, however, accumulate over time to change the egalitarian inter-relationships.

A differential speed that cycles are completed, or a growth in the number of times a particular loop is activated across periods of time can result in an aristocratic set of relationships – some holding more power and control over the system. Then we would change from a strategy assuming equal importance of all loops to analyzing the most important loop.

In sum, Causal Maps are a means to portray a complex interdependence so one can better question the situation. They help to impose some order to the domain being analyzed.

Bounded Rationality

Karl Weick (1979, p 20) discusses the concept of bounded rationality, a concept that is applicable to communications and to information systems. Bounded rationality means that all of us have perceptual and information processing limits. We may always intend to act fully rational but usually we act on easy to get to knowledge, use undemanding rules to search for a conclusion, and take shortcuts whenever possible.

This implies that we need to assume that the decision makers in our communications or information systems may use limited rationality. They form attitudes and opinions, or make decisions in terms of familiar facts and abbreviated analyses.

Weick’s discussion of Bounded Rationality extends earlier work done by Simon (1960). Simon (pp 80-84) analyzes the limits of rationality. He finds that behavior is not objectively rational for three reasons:

1. Rationality requires complete knowledge including the anticipated consequences
2. Consequences are future events so impacts can only be imperfectly anticipated
3. Even if all possible alternatives are known, it is unlikely the decision maker would be able to recall all of them in the decision making process

The needed abilities for objective rationality are at odds with the usual reality of fragmented knowledge. Objective rationality also runs counter to the devious consequences of indirect influences in a casual map. Finally, it is not reasonable to assume that all possible alternatives could be considered in a reasonable timeframe, even if they are known.

Simon concludes (p 108) that

“Human rationality operates, then, within the limits of a psychological environment. This environment imposes on the individual as ‘givens’ a selection of factors upon which he must make a decision.”

The implication of this, according to Simon, is that a deliberate control of the psychological environment can manipulate even “rational” choice or decision.

References
Simon, H.A. (1960). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization. Macmillan.

Weick, Karl (1979). The Social Psychology of Organizing, 2nd Edition. McGraw-Hill.

Is There a Smoking Hole in the Future of TV and Print?

I think yes, powerful vicious circles are converging around the traditional TV and Print media formats. They must face a new revenue reality. They must face accountability. Their God Complex days are over.

The interdependent nature of the variables in vicious circles means that different circles can become coincident and reinforcing, creating a perfect storm. TV and Print will be pulled through a vortex much more powerful than radio, and after which their look and capacity will be very much different than today.

An unspeakable degree of financial revenue destruction has been initiated. Advertising, especially classified advertising is shifting to the Internet, to the new media. Classified advertising had been the financial spine of newspapers, cross-subsidizing reporting, political commentary and editorial activities (See Free Press Article). It represented 30% (See Newspapers Suffer) to 37% of newspaper revenues (See Media Manager).

Accountability. That dread word. On the corporate side of this table, marketing has acted like a junkie in the boardrooms, tin-cupping for money without demonstrable value. On the other hand, the new media can provide the metrics that management wants.

It is plainly clear from current events that revenue base destruction, and accountability will change the business model in the traditional media of TV and Print. Their days of royal power are numbered, and they will become more of a first among equals in the world shaped by the new media.

For a more complete analysis see Redmond Review Smoking Hole.

Microsoft and New Media. The Yahoo! deal.

Microsoft needs a revenue source for its products and services in a future contended by Software as a Service, and one characterized by increasing acceptance of Open Source. Microsoft recently lost in its bid to acquire Yahoo with its well defined new media offerings coordinated with advertising revenue.

A Redmond Review article, (see Redmond Review Yahoo) cites physicist Mark Buchanan's report on mathematical studies of networks that show the phase of super-connected hubs (such as Google and Yahoo today) eventually give way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Furthermore, according to Arms (2002, pp 211-215) there is no goal of indexing the Internet entirely by any of the search sites. There is a higher return on investment for improving the secondary aspects of the search tools so they integrate better with revenue generating functions such as advertising or sales of the web search engine for corporate knowledge management software solutions. We have reached a point where the technical costs to overcome the limitations of web search engines is prohibitive and a plateau in functionality has been set. As with airports, other sites will eventually catch up with the leaders, and not much will distinguish one from the other.

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from mass advertising the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a relevant message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

Failure to buy Yahoo was good fortune for Microsoft, the price was dear and prospects not as profitable as imagined. Super-connected nodes in an aristocratic network often give way to more egalitarian networks over time, their advantage then lost. That time is now for Google and Yahoo.

References
Arms, William Y. (2001). Digital Libraries. The MIT Press.

Duncan, Tom (2005). Advertising & IMC. McGraw-Hill/Irwin.