Power Laws

John Hagel writes: “Gaussian distributions tend to prevail when events are completely independent of each other. As soon as you introduce the assumption of interdependence across events, Paretian distributions tend to surface because positive feedback loops tend to amplify small initial events. For example, the fact that a website has a lot of links increases the likelihood that others will also link to this website…In a world of power law or Pareto distributions, extreme events become much more prominent. ”