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Networks

Here positive feedback can be linked to the 'network effect'.

A 'network effect' is the positive effect an additional user of
a good or service has on the value of that product to others. When a

'network effect' is present, the value of a product or service increases
according to the number of others using it.

The classic example is the telephone, where a greater number of users
increases the value to each; even though the new user had no intention

of creating value for others, being focused on his or her own needs, but
does so regardless. Online social networks work in a similar fashion.

Increasing the users of a telephone increases value up to a point; the
point when the value to others drops because of increased congestion.

A 'positive network effect' can create a bandwagon as the perceived
increase in the value of the network encourages more people to join;

the bandwagon is a positive feedback loop.

A note: business being a human social activity, communication and
therefore positive feedback creation occurs on the network. A network
with a mix of weak and strong ties will facilitate communication and

so feedback loops. A deficient network with few ties or filled with
gatekeepers will compromise feedback.

Chaos Theory

The very roots of chaos theory lie in feedback loops.

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