I was motivated by Prof. Churchman's work on ethical systems working with OR and needed some opinions. Developing economies,like mine, can be mathematically "modeled" using OR techniques. If we look at the problem of fund(public) allotment for efficient and timely distribution, an optimization problem can be set up with constraints being(some of these constraints would be fuzzy) imposed by existing constitutional laws,economics of the location, geography involved, time delays due to decisions etc.

I am relatively new to OR and wanted to know if the above is a possible feasible problem. If yes could someone tell me some research groups who are working on this? is there a general name for this area?

asked 11 Dec '10, 19:58

bissi1's gravatar image

accept rate: 0%

Project Cybersyn attempted to run an economy in chile using OR. It did not work particularly well.

The book 'red plenty' is a mainly fiction book about how OR was used in the Soviet Union to help run the economy. Again with decidedly mixed results.

I think an economy can be modeled using OR techniques but not controlled. attempts to guide an economy based on OR seem to miss out on the messy human desires that end up being vital.




answered 12 Dec '10, 12:50

davidc%201's gravatar image

davidc 1
accept rate: 12%

stafford beer's work looks amazing... from what i just read it doesnt appear as though the project "failed" it's just that the coup happened successfully.. correct me if i am wrong

(13 Dec '10, 19:28) bissi1

I do not know enough about Allende and Pinochet to be sure about what role Cybersyn played in the coup. I doubt it was a major one as its barely mentioned in "a small earthquake in Chile" a book I read on the coup.

(20 Dec '10, 09:18) davidc 1

I just posted an idea in this post on seasteading. The idea of seasteading is to develop and experiment with new systems of government and economy in artificially constructed environments on the sea.

I think in this limited case it might be possible to constrain and control the variables enough that optimization techniques could be usefully applied. Perhaps the learning from such real-world laboratories might eventually yield discoveries and processes that would be more widely applicable to larger countries.


answered 19 Dec '10, 03:55

DC%20Woods's gravatar image

DC Woods ♦
accept rate: 5%

Everything can be modelled. The problem is that the more complicated the system, the less well the model captures all its subtleties. "All models are wrong, but some are useful." - (Box)

For complicated systems like economies, models are no better than crude approximations, and therefore any optimization or decisions based on them will be sub-optimal. Real-world systems are also not nice clean optimization problems - there are usually many objectives that all need to be considered, and some of them are not obvious but disastrous if forgotten.

There are definitely advantages that using OR can bring, but its probably best to keep the models small and focussed on particular areas - and check what happens when small changes are made before committing to large changes. The law of unintended consequences applies.


answered 15 Dec '10, 20:43

DC%20Woods's gravatar image

DC Woods ♦
accept rate: 5%

"All models are wrong, but some are useful." +1 excellent quote !

(15 Dec '10, 21:39) Bo Jensen ♦

It's doubtful economies can be controlled by any means, including OR models. I think politicians and economists just sometimes mistake the random interval between crises as a sign they're "in control".


answered 13 Dec '10, 23:24

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Paul Rubin ♦♦
accept rate: 19%

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Asked: 11 Dec '10, 19:58

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Last updated: 19 Dec '10, 03:55

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