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To: Don Mosher who wrote (32429)	9/27/2000 2:30:05 PM
From: Thomas Mercer-Hursh	Read Replies (1) \| Respond to of 54805

I understand the ambiguity and the delight in playing with my language here. It's no fun, if one can't play a bit! But, when I read what I wrote, the "physical" and the "virtual" were in separate sentences. Am I just confused? Are we referring to the same citation? I was referring to: Connection: an active link in a network, for example, A speaks to B, whether by phone [physical connection] or in person [virtual connection]. I am not totally comfortable with the use of "virtual" in the context of a connection, since there is some kind of physical link, but it seems to me that a telephone or chat room, or mailing list or whatever is a more virtual experience than interacting with the person in person. Am I missing something here? I am sure that you are correct about the engineering meaning of "positive" and "negative" feedback. However, I do not believe that authors like Mauboussin or Shapiro and Varian are using the terms in this way. If so, this is unfortunate, particularly in the context of discussing high tech since the engineering meaning is well-defined, long established, and highly meaningful for the analysis of the control of systems. Moreover, there are clearly many examples of stabilizing or homeostatic feedback mechanisms in investing as well as obvious de-stabilizing mechanisms such as panic selling. These concepts are equally applicable in the original form to fixed point or trend based means, whether upwardly or downwardly trending. My sense is that common, imprecise usage is most often that "feedback" = "negative feedback" whenever one is talking about control. If an author is using the term imprecisely or inconsistently, I'm not sure we have helped by attempting to impose a definition, especially when that definition is at variance with established usage.

To: Don Mosher who wrote (32429)	9/27/2000 3:14:32 PM
From: sditto	Respond to of 54805

<<I am sure that you are correct about the engineering meaning of "positive" and "negative" feedback. However, I do not believe that authors like Mauboussin or Shapiro and Varian are using the terms in this way. They have in mind a looser social science definition that is somewhat like the one I offered.>> I had my electrical engineering hat on (yes, the one with the propeller) when I read your definitions and believe your social science definition of positive and negative feedback is compatible with the engineering versions. Where you may have introduced some confusion was your discussion of goal states. In electrical engineering the goal state is usually to achieve system stability through negative feedback and diminishing returns whereas in investing the goal state is to achieve system instability through positive feedback and increasing returns. In an audio circuit, positive feedback results in an ear deafening shrill sound. In a business model, positive feedback results in laughing all the way to the bank. <vbg>