Feedback happens when a system's outputs are routed back as inputs as part of a cause-and-effect chain that creates a circuit or loop. The system is considered to feed back on itself at this point. When it comes to feedback systems, the concept of cause-and-effect must be handled with caution.
What is it?
There has been significant debate over the appropriate definition of feedback over the years. The definition of "circularity of action" is preferred by mathematicians and theorists interested in the principles of feedback systems because it makes the theory simple and consistent. Feedback should be a purposeful impact via some more concrete link for people with more practical goals.
- Positive feedback: Positive feedback occurs when the signal feedback from the output is in phase with the input signal.
- Negative feedback occurs when the signal feedback has the opposite polarity or is 180° out of phase with regard to the input signal.
When an incentive is used to increase low performance, the two meanings may generate misunderstanding. In contrast to definition 1, other writers use alternative words, such as self-reinforcing/self-correcting, reinforcing/balancing, discrepancy-enhancing/discrepancy-reducing, or regenerative/degenerative.
In terms of definition # 2, some writers argue that the action or impact should be described as positive/negative reinforcement or punishment rather than feedback. However, even within a single field, feedback can be classified as positive or negative depending on how values are assessed or referenced.
Constraints of both negative and positive input
While simple systems may sometimes be classified as either positive or negative, many systems with feedback loops cannot be classified as either positive or negative, especially when several loops are involved.
Finance and economics
The stock market is an example of an oscillatory "hunting" system, driven by positive and negative feedback from market players' cognitive and emotional variables. As an example:
When stocks are increasing, the assumption that additional gains are likely encourages investors to purchase; yet, the higher price of the shares, along with the understanding that the market must reach a peak before falling, deters buyers. When the market continues to decline on a regular basis, some investors may predict more losing days and refrain from buying, while others may buy because equities become increasingly cheap.