Complex Social Systems

Organizations and markets are compromised of many actors with different goals. Managers and policy-makers must not only understand the concerns and motivations of this variety of actors, but also how their actions aggregate into collective behavior and performance.

How well will two cultures assimilate after a merger or acquisition?
Will a network of aid organizations respond effectively to a crisis?

In many systems where individual decisions and actions are highly interdependent, understanding the relationship between individual and collective action is not always straightforward. Research in this focus area applies ideas and modern approaches developed to study such “complex systems” -- approaches such as computational modeling and quantitative techniques for analyzing networks -- to better understand the factors that govern the interactions between individuals and their systemic implications.

Center projects address problems ranging from the implementation of firm strategy to the aggregation of information in markets, and are often interdisciplinary collaborations that include faculty members from the Northwestern Institute on Complex Systems (NICO).

Two example application areas are briefly described below:

The Role of Network Structure in Collective Performance

How does the social structure of a group, organization, or society impact its collective performance? Professors Spiro Maroulis and Daniel Diermeier addressed this question in a number of different contexts through a series of simulation-based laboratory-experiments. In one project, they investigated how a certain class of commonly found networks -- “small world” networks characterized by densely connected subgroups that are loosely connected to each other through a small number of nodes who serve as bridges -- may provide unique performance advantages. Although a limited amount of empirical work on correlation between small world network properties and the performance of teams, organizations, or industries exists, such work necessarily backgrounds the information needed to improve real social systems -- the mechanisms implied by the network characteristics of small worlds. Through the use of laboratory-controlled experiments, the goal was to isolate the effects of those specific mechanisms.

Educational Policy and Entrepreneurship

Significant energy from a vast assortment of stakeholders has been directed at education reform. Work in this application area investigated how this energy could more effectively be converted into ideas that take hold and have impact in troubled schools and school districts. One project addressed the movement towards market-based delivery of public education. Using historical data from Chicago Public Schools to set initial conditions, Professor Spiro Maroulis and colleagues at NICO modeled the change from a non-market to choice-based system -- i.e., a system that gives households more control over which school to attend. A related project investigated the implications for both non-profit and private-sector entrepreneurs emerging from the confluence of this movement towards more choice, and the advent of technologies forcing us to rethink how and where education takes place (such as online courses, virtual schools, and "open'' textbooks). Professor Maroulis also taught a course on the Education Industry that incorporated these themes (KPPI-454).