Increasing returns economics and generalized Pólya processes

This article extends the traditional Polya scheme consisting of one urn with two colors to the schemes where multiple independent and/or interdependent urns with multiple additions and/or withdraws and several independent and/or interdependent colors are considered. It also argues that with these schemes many complex economic systems subject to increasing returns can be formalized mathematically, for they allow for positive and negative feedbacks among many variables, “jumps,” “bad” behaved dynamics, dis continuities, and interrelation among systems. © 2013 Wiley Periodicals, Inc. Complexity 19: 21–37, 2013