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Sunday, September 6, 2009

What are Complex Systems?

Complex Systems consist of diverse, interdependent, connected, adapting entities. For example, financial markets have diverse banks which are connected and interdependent and they adapt to risk and to each other.

Complex Systems (CX) are:

1. Unpredictable
2. Produce large events (wars)
3. Robust (how ecosystems withstand loss of species)
4. Produce bottom-up emergent phenomenon (how a city operates)
5. Produce Novelty/Innovation

CX are not Normal i.e. they don't follow the Normal Distribution bell curve. However, they do follow the Power Law. CX exist between order and chaos.

It is important to understand CX because the world is becoming more and more complex. It is :

1. More diverse because of more people and species
2. More interdependent because of trade
3. More Connected because of transportation and the Internet
4. More Adapt because of frequent changes in technologies

There is a difference in Complex and Complicated. Complicated Systems don't adapt.

Emergence happens when the Macro is different than Micro. For example, a single water molecule is not wet. When many water molecules get together the wetness phenomenon emerges.

Phase transitions or Tipping Points occur when the behavior changes only after a critical threshold.

A good example of adaptability is Sea Squirts who in the larval state are mobile after they find a rock to live on they eat their brain because they don't need it anymore.

Adapted from lectures by Scott Page.