COMPLEXITY: THE EMERGING SCIENCE AT THE EDGE OF ORDER AND CHAOS

• Simple things organize into complex structures despite the world’s tendency to move towards chaos
• Neoclassical economics views the world as one of diminishing return, equilibrium and perfect rationality
• The science of complexity views economics as a global adaptive system made up of many agents constantly in evolution with no equilibrium
• The structure of the system itself can result in the emergence of complexity
  • Inferior technology can be adopted because high initial cost and low marginal cost encourages high production. Customers also have an incentive to flock to a standard.
  • Origins of life could be due to emergence of reinforcing cycle of molecules acting as catalyst for other molecules. In a sense, autocatalytic sets would be alive.
  • After a supercritical threshold, the autocatalytic set becomes inevitable
• Self organized systems are adaptive (prediction and feedback).
• Cooperation leads to more cooperation resulting in more complexity
  • The environment is source of payoff reinforcing certain behaviors
  • Reproduction causes evolution, change, creativity and spontaneity
• Complexity come between order and chaos and is analogous to a phase shift
  • As ice, molecules are barely moving (Order)
  • As water, molecules are moving everywhere (Chaos)
  • When water is turning into ice, there are disorganized structures and organized structure (Complexity)
• Life is about organization.
  • healthy systems keep order and chaos in balance
  • evolution thrives with bottom up organization due to flexibility
• Self-organized criticality: steady input of something drives a great many systems in nature to organize themselves the some way

Another very good summary