The Power of Power Laws
John Hagel, Edge Perspectives, August 23, 2010.

"We're shifting from a Gaussian world to a Paretian world," writes John Hhgel, "with profound implications for business." The Gaussian world is the world of the bell curve - of averages, the golden mean, the rule of the middle. The Paretian world is the world of the power law, of a few extreme events and the everyday scattered in the long tail.

The thing with this discussion is, the two types of woprlds are being described as if they are natural phenomena, as though they are patterns that we just fall into. I don't agree with that reading - I think these are patterns we create through the design of our networks and systems. Is this how we want to organize society? I have argued in the past that we want a world that is neither Gaussian or Paretian - a world where neither the golden mean nor the extreme event swallow all else, a world where the graph represents, as much as possible, a horizontal line, a world of balance and harmony. (Hits Today: 0 Total: 736) [Direct Link] [Tags: Networks]

Share |

Comments

Re: The Power of Power Laws

jaycross, August 26, 2010

Hagel wrote this piece three years ago but I am very glad you resurrected it.

Sometimes a post clarifies a concept that has been just out of reach, and this one brought things into focus to me.

I've spent a lot of time with the normal distribution and with Pareto's Law over the decades but somehow I missed their relationship. In the terminology of Hagel's post, I had failed to connect the dots: I'd overlooked the bias from connections.

I've been contemplating how my growing fixation with flows is diverting my attention from the stocks, that is, anything more than two months old. [Comment] [Permalink] [Previous][Next]

Comment



Title
Your comment:
Enter email to receive replies:

Your comments always remain your property, but in posting them here you agree to license under the same terms as this site (CC By-NC-SA). If your comment is offensive it will be deleted.

Automated Spam-checking is in effect. If you are a registered user you may submit links and other HTML. Anonymous users cannot post links and will have their content screened - certain words are prohibited and your comment will be analyzed to make sure it makes sense.