An intelligent system is a system that has, similar to a living organism, a coherent set of components and subsystems working together to engage in goal-driven activities. In general, an intelligent system is able to sense and respond to the changing environment; gather and store information in its memory; learn from earlier experiences; adapt its behaviors to meet new challenges; and achieve its pre-determined or evolving objectives. The system may start with a set of predefined stimulusresponse rules. Those rules may be revised and improved through learning. Anytime the system encounters a situation, it evaluates and selects the most appropriate rules from its memory to act upon. Most human organizations such as nations, governments, universities, and business firms, can be considered as intelligent systems. In recent years, researchers have developed frameworks for building organizations around intelligence, as opposed to traditional approaches that focus on products, processes, or functions (e.g., Liang, 2002; Gupta and Sharma, 2004). Today’s organizations must go beyond traditional goals of efficiency and effectiveness; they need to have organizational intelligence in order to adapt and survive in a continuously changing environment (Liebowitz, 1999). The intelligent behaviors of those organizations include monitoring of operations, listening and responding to stakeholders, watching the markets, gathering and analyzing data, creating and disseminating knowledge, learning, and effective decision making. Modeling intelligent systems has been a challenge for researchers. Intelligent systems, in particular, those involve multiple intelligent players, are complex systems where system dynamics does not follow clearly defined rules. Traditional system dynamics approaches or statistical modeling approaches rely on rather restrictive assumptions such as homogeneity of individuals in the system. Many complex systems have components or units which are also complex systems. This fact has significantly increased the difficulty of modeling intelligent systems. Agent-based modeling of complex systems such as ecological systems, stock market, and disaster recovery has recently garnered significant research interest from a wide spectrum of fields from politics, economics, sociology, mathematics, computer science, management, to information systems. Agent-based modeling is well suited for intelligent systems research as it offers a platform to study systems behavior based on individual actions and interactions. In the following, we present the concepts and illustrate how intelligent agents can be used in modeling intelligent systems. We start with basic concepts of intelligent agents. Then we define agent-based modeling (ABM) and discuss strengths and weaknesses of ABM. The next section applies ABM to intelligent system modeling. We use an example of technology diffusion for illustration. Research issues and directions are discussed next, followed by conclusions.
