INCREASING RETURNS

An old saying puts it succinctly: Them that’s got shall get.

A new way of saying it: Networks encourage the successful to be yet more successful. Economist Brian Arthur calls this effect “increasing returns.” “Increasing returns” he says, “are the tendency for that which is ahead to get further ahead; for that which loses advantage to lose further advantage.”

In networks, we find self-reinforcing virtuous circles. Each additional member increases the network’s value, which in turn attracts more members, initiating a spiral of benefits.