**5.3. Edge of chaos**

The *butterfly effect*, as described by Olbolensky [23], states that small changes in one part of a system can yield dramatic changes in other parts of the system, if not the whole system. Sometimes these changes are planned, but other times they are reactive to external forces (e.g., governmental policy changes, industry changes, mergers). Managing these butterfly effects are what CAS do, they operate on the *edge of chaos*: "they are able to balance order and chaos". Complex adaptive systems self-organize and allocate resources so that they adapt to external changes by making the appropriate adjustments to the system, just enough so not to reach chaos but to adapt to external forces.
