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Emergent phenomena arise as a consequence of the interactions between
the constituent units of a system. For example, a traffic jam is
the emergent result of the interactions between many drivers. On
an individual level, each driver is trying to get somewhere and
is following (or breaking) certain rules, some legal (the speed
limit) and others societal (slow down to let another driver change
into your lane); but a traffic jam is a separate and distinct entity
that emerges from those individual behaviors. Emergent phenomena
are unpredictable and often counterintuitive because they are properties
of the whole that cannot be reduced to the behavior of the parts.
Gridlock on a highway, for example, can travel backward for no apparent
reason, even as cars move forward.
Examples of emergent phenomena in the business
world include organizational behavior that is shaped (or misshaped)
through employee bonuses and incentives, markets in which prices
are set through the myriad interactions of buyers and sellers, or
consumer buzz that propels sleeper products into runaway successes.
Icosystem captures emergent phenomena through the use of agent-based
simulation, a simulation modeling technique that models each person
such as drivers on a highway or shoppers in a supermarket-
as a distinct individual. Agent-based simulation is the only way
to analyze and understand emergent phenomena because they model
their formation from the bottom up, taking into account interactions
between agents that will generate emergent phenomena. See The
Game for an illustration of an emergent phenomenon and how agent-based
simulation can help make sense of it.
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