The science of complexity

Recall that in the El Farol problem the Irish-music fans faced the question of how many people would appear at the bar in the coming week. On the basis of their prediction, each individual then chose to go to the bar or stay home, with the actual attendance published the next day. At that time, each person revised his or her set of predictors, using the most accurate predictor to estimate the attendance in the coming week. The key components making up the El Farol problem are exactly the key components in each and every complex, adaptive system, and a decent mathematical formalism to describe and analyze the El Farol problem would go a long way toward the creation of a viable theory of such processes. These key components are:

• A medium-sized number of agents. The El Farol problem postulates 100 Irish-music fans, each of whom acts independently in deciding to attend on Thursday evenings. In contrast to simple systems—like superpower conflicts, which tend to involve a small number of interacting agents—or large systems—like galaxies or containers of gas, which have a large enough collection of agents that statistical means can be used to study them—complex systems involve a medium-sized number of agents. Just like Goldilocks’s porridge, which was not too hot and not too cold, complex systems have a number of agents that is not too small and not too big but just right to create interesting patterns of behaviour.

• Intelligent and adaptive agents. Not only are there a medium-sized number of agents, but these agents are “intelligent” and adaptive. This means that they make decisions on the basis of rules and that they are ready to modify the rules on the basis of new information that becomes available. Moreover, the agents are able to generate new, original rules, rather than being constrained forever by a preselected set of rules. This means that an ecology of rules emerges, one that continues to evolve during the course of the process.

• Local information. In the real world of complex systems, no agent knows what all the other agents are doing. At most, each person gets information from a relatively small subset of the set of all agents and processes this “local” information to come to a decision as to how they will act. In the El Farol problem, for instance, the local information is as local as it can be, because each person knows only what he or she is doing; none has information about the actions taken by any other agent in the system. This is an extreme case, however; in most systems the agents are more like drivers in a transport system or traders in a market, each of whom has information about what a few of the other drivers or traders are doing.

So these are the components of all complex, adaptive systems—a medium-sized number of intelligent, adaptive agents interacting on the basis of local information. At present, there is no known mathematical structure within which comfortably to accommodate a description of complex systems such as the El Farol problem. This situation is analogous to that faced by gamblers in the 17th century, who sought a rational way to divide the stakes in a game of dice when the game had to be terminated prematurely (probably by the appearance of the police or, perhaps, the gamblers’ wives). The description and analysis of that very definite real-world problem led Pierre de Fermat and Blaise Pascal to create probability theory. At present, complex-system theory still awaits its Pascal and Fermat. The mathematical concepts and methods currently available were developed, by and large, to describe simple systems composed of material objects like planets and atoms. It is the development of a proper theory of complex systems that will be the capstone of the transition from the material to the informational science.