The strategy dynamics of collective systems: Underlying hindrances beyond two-actor coordination

Abstract

Engineering systems, characterized by their high technical complexity and societal intricacies, require a strategic design approach to navigate multifaceted challenges. Understanding the circumstances that affect strategic action in these systems is crucial for managing complex real-world challenges. These challenges go beyond localized coordination issues and encompass intricate dynamics, requiring a deep understanding of the underlying structures impacting strategic behaviors, the interactions between subsystems, and the conflicting needs and expectations of diverse actors. Traditional optimization and game-theoretic approaches to guide individual and collective decisions need adaptation to capture the complexities of these design ecosystems, particularly in the face of increasing numbers of decision-makers and various interconnections between them. This paper presents a framework for studying strategic decision-making processes in collective systems. It tackles the combinatorial complexity and interdependencies inherent in large-scale systems by representing strategic decision-making processes as binary normal-form games, then dissects and reinterprets them in terms of multiple compact games characterized by two real-numbered structural factors and classifies them across four strategy dynamical domains associated with different stability conditions. We provide a mathematical characterization and visual representation of emergent strategy dynamics in games with three or more actors intended to facilitate its implementation by researchers and practitioners and elicit new perspectives on design and management for optimizing systems-of-systems performance. We conclude this paper with a discussion of the opportunities and challenges of adopting this framework within and beyond the context of engineering systems.