DT&SC 10-2: Positive- & Negative Feedback


What do public policies and private business
strategies consist of? Painting it in very board brushes you can distinguish among only
two kinds of interventions, positive feedback and negative feedback. One kind of positive
feedback, for example, follows the logic that if you have money in your bank account and
you earn a fixed percentage interest rate, you have at the end more money in your bank
account. Now with more money in your bank account with a fixed percentage you earn more
interest rate, and with more interest rate you have even more money in your bank account.
So that logic is here this positive runway dynamic, that more leads to more leads to
more. Now positive feedback is also that if you have money in your bank account and you
have to pay a fixed rate fee, with that you have less money in your bank account and if
you pay a 1% fee, you have to also pay less fee next round because you have less money
in your bank account. With that you even have less money in your bank account, you even
have less money. While basically what you have to do here is that you have to run it
down, you run is basically down to zero, so both of these renovate amexs are postivive
feedback. What then is negative feedback? Negative feedback, for example, follows the
following logic – it stabilizes the systems dynamic. So for example if you have the price
of something and the price is too high, you might not have many demand because not many
people can buy it. What do you do then if you do not have many demand? Well you have
to lower your prices a little bit. And if you lower your prices a little bit, demand
raises. Now if demand raises, then you can say many people want my product, so I can
lift my price again. Now if you lift your prices again, not so many people might buy
it. So now you have a more leads to less and less leads to more dynamic. You basically
stabilize the price overtime. Now another example of negative feedback, would be for
example if you have a certain temperature in a room and the temperature gets too low,
and with that you start an automatic heater and that heater then heats up the temp in
the room. If the temperature gets too high, the heaters might either stop and or even
the air condition might kick in and with that the temperature will lower again. Once it
is too low the heater might set in again, so you have this also less leads to more,
more leads to less dynamic. Basically stabilize the variable that you have in mind, so positive
feedback means a runway dynamic, you either put oil into the fire, and you blow up the
fire, or you put water into the fire and try to complete to extinguish it. Negative feedback
means that you try to stabilize it, so sometime you put a little oil and you put a little
water, and when you try to keep it in the middle value, so that is positive negative
and negative feedback. That is basically all you can do with the system’s dynamic. Including
social systems, but we are talking about. Let’s look at two examples relevant for
our field of digitalization. For example, if you have a lot of training, you increase
your chances of winning a scholarship. Right? Now if you get a scholarship you have more
training, which then increases your chances of getting a better scholarship. Which then
increases your chances, this is a positive runway dynamic. On the other hand if you have
thought of its very little training you might not have so many chances of winning a scholarship,
which means you have less training, with that you have less chances of winning. You know!
The way down, it goes downward, less becomes less becomes less. An example of negative
feedback would be for example, if you had a lack of IT professional, you would make
available a lot of scholarships. With a lot of scholarships you would create more IT professionals,
and if you have to many IT professionals, maybe it doesn’t make sense to provide more
scholarships, so you tune it down. You need exactly, again it is the logic of supply and
demand here, the right amount of IT professionals, and so you try to keep it in the middle. So
here you have two examples of about something very similar, both have to do about scholarships.
The difference being one is an example of positive feedback, a runway dynamic you either
get more leads to more leads to more or less leads to less leads to less. And the other
one is an example of negative feedback where you stabilize the systems dynamic. And that’s
basically all you can do with a systems dynamics, you either want a lot or you want nothing
or you want some. So these are the two basic categories of interventions positive and negative
feedback.




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