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2007 IEEE SMC-Hipel-Keynote-Revised Nov. 25_ 2008

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2007 IEEE SMC-Hipel-Keynote-Revised Nov. 25_ 2008 Powered By Docstoc
					       Competition and Cooperation in
Societal and Technological Systems of Systems

             Keynote Address:
     2007 IEEE International Conference
                     on
       Systems, Man, and Cybernetics:
  Smart Cooperative Systems and Cybernetics
Advancing Knowledge and Security for Humanity

                  Keith W. Hipel
               University Professor
              Conflict Analysis Group
      Department of Systems Design Engineering
              University of Waterloo

                                                 1
DEFINITION OF A CANADIAN

        A Canadian

       is an American

 who carries a Medicare Card

            but

    does not carry a gun.


                               2
            ABORIGINAL PLACE NAMES

• Canada: means “village” in the Huron language.

• Ontario: “beautiful lake” in Huron

• Toronto: “a place of meeting” in Huron

• Nunavut: “our land” in Inuktitut

• Ottawa: “to trade” from the Algonquin language

• Yukon: “great river” in the Loucheux language

• Quebec: “narrow passage” in Algonquin

• Saskatchewan: “swift flowing river” from the Cree language

                                                               3
                          PURPOSE

Present an encompassing perspective on competition and
cooperation among multiple participants strategically interacting
within societal and technological systems of systems according to
their underlying value systems as they strive to reach their goals.




By appreciating the reality that systems of systems are inhabited by
multiple participants or agents having multiple objectives, one can
adhere to adaptive and integrative decision making principles to
properly design, construct, maintain, and operate systems of systems
that serve the interests of stakeholders in a fair and sustainable
manner throughout the systems’ life cycles.

                                                                      4
                          IN A NUTSHELL

I.    Multiple participants

II.   Ethics



               Positively harness competition and cooperation

                                New field of
                 Ethical Systems of Systems Design Engineering




                                                                 5
                        CONTENTS

• Systems of Systems
• World System of Systems
• Societal System of Systems
   – Classification of Societal Conflict Models
   – Competition and cooperation in a Groundwater
     Contamination Dispute
   – Ethics in Conflict Behaviour and Policy Design
• Intelligent System of Systems
• Closing Remarks


                                                      6
               SYSTEM OF SYSTEMS (SoS)

• Solid paradigm on which to build methodologies and techniques in
  systems, man, and cybernetics.

• Alternative labels:
    – Federation of Systems
    – Systems Family




                                                                     7
                           Societal                                                Natural
                      System of Systems                                       System of Systems

                                                        By-products


                                                                                    Atmosphere
                                                                                       (air)
                              Energy




                                                                                    Biosphere
                            Services and                                              (life)
                           Infrastructure


                                                                      Hydrosphere                 Lithosphere
                                                                        (water)                  (soil and rock)
             Agriculture                    Industry




                                                         Resources




   Societal
Induced Effects

                                                   Environmental
                                                 System of Systems


              Societal and Environmental Systems of Systems
                                                                                                                   8
                                                         Solar

                                        Wind




               Tidal and
                 Wave
                                                                             Thermosphere




                                           s
                                  y S le
                                        rce
                               erg wab
                                     ou
                                                                              Mesosphere




                             En ene
                                R
                                                                             Stratosphere
      Geothermal                                                             Ozone layer




                                                                             Troposphere
     Hydropower                                                      Holds 75% of gaseous mass and
                                                                                 water


                                                 O2



                                                  CO 2
                   Biomass
                                                                 2
                                                                 O



                                                                         2
                                                                      CO
                                       Nuclear
                                                         Coil
                                                         Oil
                                                         Gas




Interactions among Energy and Atmospheric Systems of Systems
                                                                                                     9
                   SoS CHARACTERISTICS

•   Operational independence of each individual system
•   Managerial independence of an individual system
•   Geographical distribution of individual systems is often large
•   Emergent behaviour
•   Evolutionary development
•   Self-organization
•   Adaptation

     (Sage and Biemer, 2007;Sage and Cuppan, 2001; Maier, 1998)




                                                                     10
    KEY SYSTEM OF SYSTEMS METHODOLOGIES

•    Complex adaptive systems
•    Chaos theory
•    Cybernetics
•    A rich range of approaches to systems modelling and analysis




    A comprehensive systems of systems theory remains to be developed




                                                                        11
           COMPLEX ADAPTIVE SYSTEMS

• Different kinds of agents competing and cooperating with one
  another.
                  Are intelligent
                  Can adapt
• Agents
                  Can learn
                  Behave according to their value
                  systems

• Decision making involving agents may be distributed over space and
  time, and within and among different types of systems.

• Origins: evolutionary biology, computer science and social design

• Example: Electrical supply system in North America.
                                                                      12
           KEY SYSTEMS COMPONENTS


• Multiple participants

              Value systems
• Ethics
              Interaction Protocols

   Participants can be purely competitive or follow different
                      levels of cooperation.

                                                                13
        ETHICAL CONFLICT LEADERSHIP

Differences in value systems and underlying ethics and beliefs provide
           the basic fuel for igniting and maintaining conflict.



Society has a duty to encourage ethical value systems for its citizens.



    Purposeful ethical design of systems of systems coupled with
    individuals adhering to personal ethical principles are needed to
          create a robust and reliable society that will persist.



                                                                          14
             WORLD SYSTEMS OF SYSTEMS

• Environmental

• Societal

• Intelligent

• Integrated




                                        15
                        Multiple Participant-Multiple Objective
                                  Systems of Systems




     Environmental                                                     Societal
    System of Systems                                             System of Systems




                      Integrated                     Intelligent
                  System of Systems              System of Systems



Types of Multiple Participant-Multiple Objective Systems of Systems
                                                                                      16
       EXAMPLES OF SYSTEMS OF SYSTEMS
• Environmental System of Systems
  Hydrological, atmospheric, zoological, botanical, ecological and
  geological systems.

• Societal System of Systems
  Economical, political, agricultural, industrial, governmental,
  infrastructure and city systems.

• Intelligent System of Systems
  Automated bidding and mechatronic production systems.

• Integrated System of Systems
  North American electrical supply system, flood control system in
  Japan, eBay, and modern aircraft.

                                                                     17
             WORLD SYSTEMS OF SYSTEMS

• Environmental

• Societal

• Intelligent

• Integrated




                                        18
The Hydrological Cycle
                         19
                           Societal                                                 Natural
                      System of Systems                                        System of Systems
                                                         By-products



                                                                                     Atmosphere
                                                                                        (air)
                              Energy




                                                                                     Biosphere
                            Services and                                               (life)
                           Infrastructure


                                                                       Hydrosphere                 Lithosphere
                                                                         (water)                  (soil and rock)
             Agriculture                    Industry




                                                          Resources




   Societal
Induced Effects

                                                   Environmental
                                                 System of Systems


              Societal and Environmental Systems of Systems
                                                                                                                    20
             WORLD SYSTEMS OF SYSTEMS

• Environmental

• Societal

• Intelligent

• Integrated




                                        21
  SOCIETAL SYSTEMS OF SYSTEMS                   ENVIRONMENTAL SYSTEMS OF SYSTEMS

                                                By
        Many types of societal               Products
         systems of systems




                                                                        Biological Systems
                Services                      Natural      Atmosphere
                                              Effects
Defence                                                      Water
                                           Human-induced
and space                         Energy
                                              Effects
                                                             Land
             Infrastructure and   …
      …




               Transportation
                                           Resources




            Societal and Environmental Systems of Systems


                                                                                             22
         SOCIETAL SYSTEMS OF SYSTEMS

• Classification of Societal Conflict Models

• Competition and Cooperation in a Groundwater Contamination
  Dispute

• Ethics in Conflict Behaviour and Policy Design




                                                               23
    DECISION MAKING


Must consider physical realm of

            nature

    and the social world of

         humankind



                                  24
           Societal            Physical
           Systems             Systems
           Models              Models




The Duality of Systems Modeling of a Realworld Problem


                                                         25
       SYSTEMS OF SYSTEMS TOOLBOX

A wide range of systems tools from both the physical and decision
sciences are required to investigate a given problem in sustainable
development.



Decision Support Systems (DSSs) allow these systems tools to be
                  conveniently used in practice.




                                                                      26
           CLASSIFICATION OF SOCIETAL
               CONFLICT MODELS
• Conflicts inevitably arise whenever humans interact.
  Example: environmentalists are in conflict with private companies
  that would like to export water in bulk quantities.

• Because of the ubiquitous nature of conflict, research in conflict
  resolution has taken place in a wide range of disciplines.

• Many formal models for use in conflict resolution and decision
  making situations were developed in the fields of
  Operational Research and Systems Engineering.




                                                                       27
       GENEALOGY OF FORMAL CONFLICT
                 MODELS

                    Game Theory


 Nonquantitative                  Quantitative Procedures
  Approaches


   Metagame                   Normal   Extensive Form . . .   Cooperative Game
   Analysis                    Form                               Theory
                     Drama
    Conflict         Theory
    Analysis

Graph Model for Conflict
      Resolution




                                                                          28
                          PREFERENCES

• Would you like to have tea or coffee to drink.
   – Quantitative response: I have a utility value of 1.9673 for coffee and
     1.0000 for tea.
   – Human response: I would prefer to drink tea. Thank you.


• Quantitative preferences:
   – Cardinal number is assigned to each state or object (ex. Dollars or utility
     value).


• Non-quantitative or relative preferences:
   – One state is either more preferred, less preferred or equally preferred to
     another.


                                                                              29
        TYPES OF RELATIVE PREFERENCES

• Ordinal
• Strictly ordinal
                      Transitive


• Intransitive

• Unknown

• Greatly more (or less) preferred




                                        30
 GRAPH MODEL FOR CONFLICT RESOLUTION

• Handles a rich range of relative preferences



       Takes into account a given decision maker’s value system



• Models both independent (noncooperative) and coalitional
  (cooperative behaviour)

• Provides key strategic guidance for reaching win/win resolutions



                                                                     31
            Competition and Cooperation
  Noncooperative                           Cooperative
    Behaviour                               Behaviour

         Nash

General Metarationality
                          Coalitions   Coalitional versions
     Symmetric
    Metarationality                           of the

  Sequential Stability                   noncooperative
                                        solution concepts
Limited Move Stability

     Nonmyopic


                                                              32
 COMPETITION AND COOPERATION IN A
GROUNDWATER CONTAMINATION DISPUTE




                                33
    MODELING PHILOSOPHY OF THE GRAPH
     MODEL FOR CONFLICT RESOLUTION

• Determine the best a decision maker can do on his or her own.

• Check if the decision maker can do even better by cooperating with
  others through coalition formation.




                                                                       34
  ELMIRA GROUNDWATER CONTAMINATION
               DISPUTE

• Elmira is a town of 7,500 residents located in Southern Ontario,
  Canada.

• Municipal water is drawn from an underground aquifer.

• In late 1989, the Ontario Ministry of the Environment (MoE)
  discovered that the aquifer was contaminated by a carcinogen N-
  nitroso demethylamine (NDMA).

• Uniroyal Chemical Ltd. (Uniroyal) operates NDMA-producing
  processes.


                                                                     35
 ELMIRA GROUNDWATER CONTAMINATION
              DISPUTE

• MoE issued a Control Order to Uniroyal to clean up the
  contaminants.

• Uniroyal appealed the Control Order.

• Regional Municipality of Waterloo and Woolwich Township (Local
  Government) hired consultants and obtained legal advice.

• Negotiations involving the three DM’s took place in mid-1991.



                Study the negotiations using GMCR II

                                                                  36
                         GMCR II

A flexible and comprehensive Decision Support System which
allows the Graph Model for Conflict Resolution methodology to be
applied to practical real world problems.




                                                                   37
                              INPUT DATA SUBSYSTEM
                                INPUT DATA SUBSYSTEM
                                  Decision Makers
                                     Decision Makers
                                      Options
                                         Options
                                   Feasible States
                                     Feasible States
                                  State Transitions
                                    State Transitions
                                    Preferences
                                       Preferences


                                      ANALYSIS ENGINE
USER INTERFACE
 USER INTERFACE                          GMCR II
                                      Coalition Analysis



                            OUTPUT DATA SUBSYSTEM
                            OUTPUT DATA SUBSYSTEM

                               Individual Stabilities
                                 Individual Stabilities
                                   Equilibria
                                     Equilibria
                                Coalition Stability
                                  Coalition Stability



                  GMCR II Structure

                                                           38
APPLYING THE GRAPH MODEL FOR
    CONFLICT RESOLUTION
          Real - world Conflict


            Decision Makers


                Options


            Feasible States       Modeling

            Allowable State
             Transitions

          Relative Preferences


         Individual Stabilities


              Equilibria          Analysis

           Interpretation and
          Sensitivity Analyses

         Information to Assist
          Decision Makers

                                             39
     Evolution of the Elmira Conflict from the Status Quo, to a
     Transitional Non-cooperative Equilibrium and to a Final
                Cooperative Coalition Equilibrium
                                Transitional Non-
                  Status                                Cooperative
                                   cooperative
                   Quo                                  Equilibrium
                                   Equilibrium
MoE
1. Modify           N                  N                    Y
Uniroyal
2. Delay            Y                  Y                    N
3. Accept           N                  N                    Y
4. Abandon          N                  N                    N
Local
Government
5. Insist           N                  Y                    Y
State Number        1                  5                    8
                                                                  40
DISPLAYING DMs AND OPTIONS IN THE
     ELMIRA CONFLICT MODEL




                                    41
DIALOG BOX FOR THE ENTRY OF
MUTUALLY EXCLUSIVE OPTIONS




                              42
DISPLAYING THE LIST OF FEASIBLE STATES




                                     43
DIALOG BOX FOR SPECIFYING
   IRREVERSIBLE OPTIONS




                            44
DIALOG BOX FOR RELATIVE PREFERENCE
            ELICITATION




                                     45
DIALOG BOX FOR ENTERING OPTION PRIORITIZING
      PREFERENCE STATEMENT FOR MoE




                                          46
            OPTION PRIORIZING FOR MoE
Preference
                                       Explanation
Statements
               MoE most prefers that Uniroyal not abandon its Elmira
   -4
               plant.
               Next, MoE would like Uniroyal to accept the current
    3
               Control Order.
               MoE then prefers that Uniroyal not delay the appeal
   -2
               process.

   -1          MoE would not like to modify the Control Order.

               MoE prefers that Local Government insists that the
 5 iff -1      original Control Order be applied (5), if and only if (iff) it
               does not modify the Control Order (-1) itself.

                                                                            47
STATE RANKING FOR MOE RESULTING
    FROM OPTION PRIORITIZING




                                  48
                OPTION PRIORITIZATION

• Provides an operational approach for conveniently eliciting the
  relative preferences of a decision maker.




   Clearly reveals the underlying value systems of the decision makers
   through the prioritization of preference statements.




                                                                     49
                 ANALYSIS AND RESULTS

• GMCR II analyzes every state for stability for each DM according to
  all of the solution concepts in Table 1.

GMCR II CAN DISPLAY

• Individual stability results.
• Equilibria according to the preferences of a given decision maker.
• Customized equilibria after the user specifies the kind of solution
  concept each decision maker should follow.
• Common features of the equilibria.
• Equilibria which contain specified patterns desired by the user.


                                                                        50
                    COALITION ANALYSIS

• MoE and Uniroyal together control the transition from state 5 to 8.

• Both are better off at state 8 than at state 5.



   On October 7, 1991, MoE and Uniroyal dramatically announced an
   agreement on a modified version of the original Control Order,
   which moved the conflict from the non-cooperative equilibrium at
   state 5 to the cooperative equilibrium at state 8.



                   This is called an Equilibrium Jump.

                                                                        51
   Evolution of the Elmira Conflict from the Status
   Quo, to a Transitional Non-cooperative Equilibrium
   and to a Final Cooperative Coalition Equilibrium
                          Transitional Non-
               Status                         Cooperative
                             cooperative
                Quo                           Equilibrium
                             Equilibrium
MoE
1. Modify        N               N                Y
Uniroyal
2. Delay         Y               Y                N
3. Accept        N               N                Y
4. Abandon       N               N                N
Local
Government
5. Insist        N               Y                Y
State Number     1               5                8
                                                       52
                       CONCLUSIONS

• As illustrated by the Elmira conflict, GMCR II can be conveniently
  applied to an actual conflict.

• GMCR II can determine non-cooperative equilibria which reflect the
  best a DM can do on his or her own when a given equilibrium is
  reached.

• GMCR II can indicate when beneficial coalitions can be formed so
  that coalition members can achieve even better results.




                                                                       53
      THE GRAPH MODEL FOR CONFLICT
    RESOLUTION: RECENT DEVELOPMENTS

• Identifying opportunities for coalition formation to move to a
  mutually preferred stable outcome
• Handling emotions and strength of preference
• Tracing the evolution of a conflict to a final outcome
• Taking care of uncertain preference information
• Incorporating policy analysis into a conflict study
• Modeling attitudes and misperceptions
• Determining strategic implications of misperceptions
• Having efficient algorithms for handling large conflicts




                                                                   54
      ETHICS IN CONFLICT BEHAVIOR AND
                POLICY DESIGN
• A person’s or an organization’s ethics or value system is
  reflected by its preferences and the actions it takes in a
  given decision situation.

• Illustration:

   The Provincial Government of Newfoundland and Labrador most
   prefers to lift A ban on bulk water exports because of the economic
            benefits that can be gained by higher-priced water.


The Government prefers economic gain over environmental protection.


 From the Environmentalists’ viewpoint, the Government is unethical.
                                                                     55
               DESIGN OPPORTUNITY

Great need for responsible and ethical designs of policies,
governance organizations and associated infrastructure underlying
our societal systems of systems



  Misplaced value systems are causing havoc around the globe.




                                                                    56
MISPLACED VALUE SYSTEM


      A Fire Fighting
    Negotiating System
        Using the
   Unidimensional Value
            Of
  Bottom Line Economics


                          57
58
                  TRAGEDY OF COMMONS

• Irresponsible utilization of a common resource due to individual greed
  causes the destruction of the resource.

• Example: One nation continues to harvest an endangered species of fish,
  resulting in the extinction of the fish, since other nations do likewise.

• Societies are participating in innumerable versions of Tragedies of the
  Commons as human populations explode and common resources are
  depleted.



       Societies require ethical sustainable behavior within the confines of
   enforceable international agreements closely connected to trade agreements.

                                                                              59
           SUSTAINABLE DEVELOPMENT

The economic needs of society are met in a manner which maintains a
        healthy environment for present and future generations.


The earth is not an infinite source of raw materials nor an infinite sink
                            for absorbing wastes.


                         Inherent conflict:
             Economics versus Environmental Protection


 Future generations and nature are not sitting at the bargaining table.

                                                                          60
                      EASTER ISLAND

• The Moai people on Easter Island destroyed their environment by
  cutting down all of the trees.

• When the Dutch explorer Jacob Rogereen arrived on Easter Island
  on Easter Sunday, 1722, the Moai people had disappeared.

• Only large stone statues of grotesquely-shaped humans remain as
  tombstones marking a once great culture.




                                                                    61
     INTERNATIONAL TRADE AGREEMENTS

• Prioritize profits of large corporations, bottom-line economics, and
  protection of foreign investments.

• Directly challenge national social and environmental policies, laws
  and regulations.



     Cause social hardship and environmental devastation.




                                                                         62
AMERICAN FINANCIAL SYSTEM

         Value system is in reverse.

         Society serves the system.

   Financial system should serve society.

 Unethical and unfair to individual citizens.




                                                63
AMERICAN FINANCIAL SYSTEM

  Removal of regulations protecting society

 Market “fox” is guarding the chicken coop.

 System collapses from greed and indigestion.

            Robustness removed.




                                                64
    AMERICAN FINANCIAL SYSTEM

          Subprime mortgages traded globally



Mortgages lenders disconnected from the mortgage buyers.



Unbounded uncertainty in this complex system of systems.




                                                           65
GENERIC CONFLICT OF VALUES


     Sustainable Ecosystem
             (SES)
             Values




    Global Market-driven Economy
               (GMDE)
                Values



                                   66
            THE NEW ORLEANS DEBACLE
• The flooding of New Orleans in August 2005 by Hurricane Katrina
  was not a natural disaster.

  It was a man-made disaster created by big-money politics, shoddy
     engineering, environmental ignorance, and misplaced priorities.

  Today, New Orleans is a disaster waiting to happen when a strong
              hurricane (not a weak category 2) strikes.

        A pathetic floodwall is all that stands between disaster.

     The survival of New Orleans depends on a sustainable coast.

Source: Time magazine Special Report: Why New Orleans Still Isn’t
  Safe, August 2007
                                                                       67
68
69
           WHY NEW ORLEANS DROWNED?

• The principle of sustainability was purposefully ignored and a
  creeping corrupted value system was the real culprit that drowned
  New Orleans.

          We must design our systems of systems according to
                    responsible and ethical values

In fact, it is our called duty as Systems Engineers to carry this important
     message everywhere and ensure that our organizations adhere to it.




                                                                         70
                NEW ORLEANS SLOGANS

• Maker levees, not war.

• Fix the coast or we are toast. (Need wetland to absorb storm surges)

   US Corps of Engineers is still concentrating on controlling nature
                       instead of preserving it.

 There is even a plan to build levees along the entire coast: “The Great
                            Wall of Louisiana”




                                                                        71
 THE GREAT ELECTRICAL SYSTEM FAILURE

• At 4:11 PM on Thursday August 14, 2003, the electrical supply
  system in the northeastern part of North America suddenly ceased to
  function.

• Canadian Province of Ontario and seven nearby American states
  were affected.

• 10 million Canadians and 40 million Americans were without
  electricity.

• 22 nuclear and 80 fossil-fuel plants were shut down.

• Electrical system out of commission for up to 30 hours.

                                                                    72
   Power blackout on August 14, 2003 in the
       North-Eastern U.S. and Canada
(Source: http://www.vectorone.info/power.htm)
                                                73
  A CONFLICT OF VALUES

  Sell to the highest bidder
 (Maximize profits for corporations)




 Provide reliable and low-cost
electrical supply for all citizens
(Socially and environmentally responsible)


                                             74
               CONFLICT WITH NATURE

To obtain the highest electricity prices, generating companies may send
                        power over long distances.



    May overload the system and will cause high electricity losses.



Market-driven economic values are in direct conflict with the forces of
                       basic physics or nature.




                                                                      75
  CANADA’S GLOBAL WARMING POLICY

“A Complete and total fraud”

Former US Vice President Al Gore Al Gove gives his presentation at
the Green Living Show in Toronto on April 28, 2007




                                                                76
                   GLOBAL WARMING

                       Distorted value system

Economics is held at a much higher priority than humans’ life support
                          system of systems.

              Atmospheric systems is highly unstable.

      Irreversible change may gradually or unexpectedly occur.




                                                                    77
             WORLD SYSTEM OF SYSTEMS

• Environmental

• Societal

• Intelligent

• Integrated




                                       78
        INTELLIGENT SYSTEM OF SYSTEMS

• An Intelligent System of Systems is an artificial, computerized world
  inhabited by agents that interact with one another as they strive to
  reach their objectives either independently or in cooperation with
  other agents.

• An agent may be a software program that represents someone’s
  bidding strategy and objectives when purchasing a product on the
  Internet or it may be a mechatronic entity such as a robot working in
  cooperation with other robots assembling a car on a production line.

• A specific intelligent system consisting of multiple interacting agents
  is entirely created by humans.


                                                                       79
 INTELLIGENT SYSTEM OF SYSTEMS (Cont’d)

• A given agent living in the system is capable of independent or
  autonomous action on behalf of its user or owner and behaves
  according to the powers that it has been bestowed in its software
  design as it strives to achieve its preprogrammed goals by following
  particular strategies it can control.

• Often agents are programmed to cooperate with one another in order
  to enhance the effectiveness of the intelligent system to achieve its
  goals.

• A protocol constitutes the public rules by which agents can come to
  agreements within a given system or domain.


                                                                        80
 ETHICAL INTELLIGENT SYSTEMS DESIGN

Just like the Dutch created the polders in Holland, human beings are
       the designers, builders and caretakers of intelligent systems.



  Humans have a great moral responsibility to construct intelligent
 systems having social environments in which agents behave ethically
 under appropriate domain protocols and strategies as they compete to
         obtain results which in turn must be ethical and fair.




                                                                        81
    MODELLING CONFLICT IN INTELLIGENT
                SYSTEMS

• Rosenschien and Zlotkin (1994) mention that they directly import
  concepts from game theory for employment in their formal analyses
  of rules or protocols governing the high-level behavior of interacting
  computer systems or agents.



   However, it is difficult to apply game theory to conflicts arising among
   decision makers in a societal context such as the groundwater
   contamination dispute.

• Designers may wish to consider incorporating into their intelligent
  systems design flexible concepts offered by non-quantitative conflict
  analysis techniques.
                                                                              82
       GENEALOGY OF FORMAL CONFLICT
                 MODELS

                    Game Theory


 Nonquantitative                  Quantitative Procedures
  Approaches


   Metagame                   Normal   Extensive Form . . .   Cooperative Game
   Analysis                    Form                               Theory
                     Drama
    Conflict         Theory
    Analysis

Graph Model for Conflict
      Resolution




                                                                          83
 DRAWBACKS OF CLASSICAL GAME THEORY

• Preferences over states for a decision maker are represented
  cardinally by von Neumann-Morgenstern utilities.


   These are notoriously difficult to calibrate. People think in terms of
                          relative preferences.

• Players must act in a specific sequence (extensive-form game) or
  simultaneously (normal-form game).


     In social conflicts as well as disputes among agents in a complex
    intelligent system like the Internet, players can choose to act in any
                   sequence, at the same time or not at all.
                                                                         84
 COMPETITION AND COOPERATION IN THE
GRAPH MODEL FOR CONFLICT RESOLUTION

• Determine the best a decision maker can do on his or her own.

• Check if the decision maker can do even better by cooperating with
  others through coalition formation.




                                                                       85
   ETHICAL INTELLIGENT SYSTEMS DESIGN
              ENGINEERING

1. Design rules and protocols that only permit ethical behavior and
   produce desirable consequences.
   Example: Each agent would have a preprogrammed value system that
   prioritizes environmental stewardship and societal well-being over profit
   maximization. A negotiation protocol would expose and penalize agents
   who practice deception and cheat.

2. Encourage competitive behavior within appropriate social and
    environmental constraints in order to reduce the cost of a successful
    bid and thereby keep the price of finished products as low as
    possible.

3. Use simulation or other means to test the ethical and economic
    behavior of these complex adaptive systems before they are actually
    put in place.
                                                                               86
             WORLD SYSTEM OF SYSTEMS

• Environmental

• Societal

• Intelligent

• Integrated




                                       87
         Societal   Integrated Intelligent
         System     System of Systems
            of       Systems       of
         Systems      (Mixed Systems
                       Life)



            Environmental System of
                   Systems


World System of Systems: Competition and Cooperation
               Among Systems Agents
                                                       88
                 INTEGRATED SYSTEMS

• Combination of societal and intelligent systems.
• Examples:
   – People and software agents placing bids within eBay
   – Modern aircraft
   – Electrical supply system

• An intelligent system should be designed using concepts from
  Ethical System Design Engineering and take into account physical
  constraints.

• A human or an agent may not know if it is interacting with another
  human or agent.

                                                                       89
 MULTIPLE PARTICIPANT DECISION MAKING

• Each type of system, or system of systems, is fraught with
  interacting and conflicting agents who may also be in dispute with
  decision makers existing in other systems.

• Participants can ethically interact in a highly competitive manner or
  exhibit cooperation via coalition formation.




                                                                          90
                        Multiple Participant-Multiple Objective
                                  Systems of Systems




     Environmental                                                     Societal
    System of Systems                                             System of Systems




                      Integrated                     Intelligent
                  System of Systems              System of Systems



Types of Multiple Participant-Multiple Objective Systems of Systems
                                                                                      91
                           Societal                                                 Natural
                      System of Systems                                        System of Systems
                                                         By-products



                                                                                     Atmosphere
                                                                                        (air)
                              Energy




                                                                                     Biosphere
                            Services and                                               (life)
                           Infrastructure


                                                                       Hydrosphere                 Lithosphere
                                                                         (water)                  (soil and rock)
             Agriculture                    Industry




                                                          Resources




   Societal
Induced Effects

                                                   Environmental
                                                 System of Systems


              Societal and Environmental Systems of Systems
                                                                                                                    92
  ETHICAL SYSTEM OF SYSTEMS DESIGN
            ENGINEERING

Design and operate systems of systems in which multiple
participants compete and cooperate in an ethical fashion according to
their value systems to create beneficial consequences for maintaining
a sustainable, fair and secure society.




                                                                   93
                   BEHAVIOR OF AGENTS

• Solution concepts for describing behavior of agents under conflict in
  societal systems can be considered for employment in other kinds of
  systems.

• The employment of classical game theory methods in intelligent and
  integrated systems should be carefully assessed.

• Any conflict or game theory method utilized within a given system
  should be scientifically tested.

   When necessary, suitable refinements and extensions can be made to the
   conflict models being entertained or a new class of models can be created.


                                                                            94
  SPECIFIC RESEARCH TOPICS OF MULTIPLE
      PARTICIPANT DECISION MAKING

• Determine if non-quantitative techniques can be used outside of the
  domain of societal systems.

• For example, the graph model for conflict resolution, along with its
  associated solution concepts, may be useful for designing the
  behavior of agents living in a particular intelligent system in which
  the agents interact in a fashion that mimics human behavior under
  conflict.



   Technology transfer from one area of system of systems design
   engineering to another.

                                                                          95
       GENEALOGY OF FORMAL CONFLICT
                 MODELS

                    Game Theory


 Nonquantitative                  Quantitative Procedures
  Approaches


   Metagame                   Normal   Extensive Form . . .   Cooperative Game
   Analysis                    Form                               Theory
                     Drama
    Conflict         Theory
    Analysis

Graph Model for Conflict
      Resolution




                                                                          96
                          IN A NUTSHELL

I.    Multiple participants

II.   Ethics



               Positively harness competition and cooperation

                                New field of
                 Ethical Systems of Systems Design Engineering




                                                                 97
           CONFLICT ANALYSIS GROUP
               RESEARCH TEAM
            Department of Systems Design Engineering
                       University of Waterloo
Faculty Members
Keith W. Hipel – Coordinator
Liping Fang – Ryerson University
D. Marc Kilgour – Wilfrid Laurier University
Kevin W. Li – University of Windsor

Post-Doctoral Fellows
Ye Chen; Amer Obeidi; Lizhong Wang
Doctoral Students
Majid Sheikhmohammady; Haiyan Xu; Qian Wang; Saied Yousefi;
Master’s Students
Sean Walk; Kaixian Hu; Yi Ke
Senior Project Students
Global Network
                                                              98
                       PANEL SESSION

• The Future of Systems, Man and Cybernetics: Application
  Domains and Research Members

• Panelists: Keith Hipel
             Mo Jamshidi
             Jim Tien (Chair)
             Chip White




                                                            99
AMERICAN FINANCIAL SYSTEM

         Value system is in reverse.

         Society serves the system.

   Financial system should serve society.

 Unethical and unfair to individual citizens.




                                                100
AMERICAN FINANCIAL SYSTEM

  Removal of regulations protecting society

 Market “fox” is guarding the chicken coop.

 System collapses from greed and indigestion.

            Robustness removed.




                                                101
    AMERICAN FINANCIAL SYSTEM

          Subprime mortgages traded globally



Mortgages lenders disconnected from the mortgage buyers.



Unbounded uncertainty in this complex system of systems.




                                                           102
                   GLOBAL WARMING

                       Distorted value system

Economics is held at a much higher priority than humans’ life support
                          system of systems.

              Atmospheric systems is highly unstable.

      Irreversible change may gradually or unexpectedly occur.




                                                                   103
                 END OF THE COLD WAR

Anatol Rapoport predicted that an enlightened Soviet Leader would end
                            the Cold War.
          (1983 presentation at the University of Waterloo)

 The US Government was incapable of instituting real change because
               of its suffocating lobbying system.

 Soviet Premier Gorbachev stopped the ridiculous Clod War in 1990.

Likewise, China has a unique historical opportunity to lead the world in
                      green house gas reduction.
  US MEDICAL SYSTEM

       Distorted value system.

        Profit maximization.

The sicker you are, the more you pay.

           Unfair society.




                                        105
CANADIAN, GERMAN AND FRENCH
      MEDICAL SYSTEM

        Ethical value system

         Universal coverage

          Equal risk sharing

       Everyone pays the same.

           Robust society




                                 106
                         INSIGHT

An equal risk sharing, universal coverage, medical system can be
                         designed using a:
                             public,
                             private or
                             mixed system



             Design a system that can deliver in practice according
               to the underlying values of equal risk sharing and
                               universal coverage.



                                                                   107
           EFFECTIVE MEDICAL SYSTEM

                   Decide upon underlying values.

Design a system that works in practice according to culture, tradition,
                          and other factors.

Compare the various implementation designs according to criteria that
                     reflect the underlying values.

         Improve system according to performance criteria.




                                                                      108
 OPPORTUNITY FOR THE GLOBE AND US
           LEADERSHIP

  US President Barok Obama could use the financial crisis to
meaningfully address climate change and institute an integrative and
               adaptive global governance system.



          A unique historical opportunity for the USA.




                                                                  109
                            CHINA

                  Bright highly educated leader.

An enlightened leader has the power to implement dramatic changes
     (ex. Deng Xiao Ping’s economic reforms of the late 1970’s.)

Increasing gaps between the rich and poor motivates environmental
                              problems.

        Huge investments in education and infrastructure.




                                                                    110
                               USA

             Legacy of neo-conservative incompetence

Financial crisis gives change of real reform by Obama. Smothering
          lobbying system stifle, needed political initiatives.

           See books in social and environmental reform

Increasing gap between the rich and poor. A spirit of innovation and
                          entrepreneurship.




                                                                    111
               EUROPEAN UNION

             Informed, highly trained leaders.

Cooperatively implemented, real free trade over many years.

       Socially and environmentally responsible.
               Fairness in wealth sharing.
      Huge investment in research and development.
                    A race to the top.




                                                              112

				
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