2.3 Reinforcing feedback, fashion and path dependency

2.3 Reinforcing feedback, fashion and path dependency

Key Points

• Peoples’ uptake of beliefs, ideas, fads, fashions and trends are often driven by positive feedback mechanisms. This is called the “bandwagon effect”.
• The value of a network of people or machines is also driven by positive feedback. This is called the “network effect”.
• Positive feedback means that our current decisions often depend on and are constrained by decisions we have taken in the past. This is called “path dependency”.
• “Lock-in” occurs as the more people use a technology or service, it becomes too costly to change to another technology or design and the dominant product becomes an industry standard.
• Path dependency exists in urban economics where it is called “economies of agglomeration”.

1. Watch the video

2. Do the exercise

Draw a reinforcing feedback loop. This exercise will help you practice drawing a reinforcing feedback loop. Facebook is developing a camera app to encourage its users to share more original photos and videos. You can read the online article here. The growth in the number of active Facebook users is driven by a reinforcing loop. Can you draw it?

Hint: You only need two variables two draw a reinforcing loop – the performance variable and the growing action. Start by identifying these two and then you can add extra intermediary variables to improve the clarity of your systemic story.

You can refer to the short text entitled “Seeing and drawing reinforcing feedback” in the Unit 2 additional materials for extra help. A suggested worked solution is available in the additional materials section.

Additional materials

• Exercise – example solution. This is a suggested worked solution for the additional exercise “Draw a reinforcing feedback loop”.
• Video sources and bibliography. The web sites, attributions and sources cited in the video “Reinforcing feedback, fashion and path dependency”.
• The video transcript.