Multiplicative Growth
This typically produces log-normal distributions that exhibit extreme inequality and approximate power laws in their upper tails.
When growth rates are proportional to current size (rich get richer), and growth rates vary stochastically across individuals, size distributions become increasingly unequal over time. This typically produces log-normal distributions that exhibit extreme inequality and approximate power laws in their upper tails. Trees that are slightly larger have advantages (more light access, more photosynthesis, more growth), creating positive feedback: size begets more growth begets more size.
Business Application of Multiplicative Growth
Multiplicative growth processes explain why forest trees, corporate revenues, and city sizes exhibit extreme size inequality - initial advantages compound through positive feedback, amplifying differences far beyond initial quality gaps.