An agent-based optimization framework for engineered complex adaptive systems with application to demand response in electricity markets

The main objective of this research is to develop an integrated method to study emergent behavior and consequences of evolution and adaptation in engineered complex adaptive systems (ECASs). A multi-layer conceptual framework and modeling approach including behavioral and structural aspects is provided to describe the structure of a class of engineered complex systems and predict their future adaptive patterns. The approach allows the examination of complexity in the structure and the behavior of components as a result of their connections and in relation to their environment. This research describes and uses the major differences of natural complex adaptive systems (CASs) with artificial/engineered CASs to build a framework and platform for ECAS. While this framework focuses on the critical factors of an engineered system, it also enables one to synthetically employ engineering and mathematical models to analyze and measure complexity in such systems. In this way concepts of complex systems science are adapted to management science and system of systems engineering. In particular an integrated consumer-based optimization and agent-based modeling (ABM) platform is presented that enables managers to predict and partially control patterns of behaviors in ECASs. Demonstrated on the U.S. electricity markets, ABM is integrated with normative and subjective decision behavior recommended by the U.S. Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC). The approach integrates social networks, social science, complexity theory, and diffusion theory. Furthermore, it has unique and significant contribution in exploring and representing concrete managerial insights for ECASs and offering new optimized actions and modeling paradigms in agent-based simulation.