Unveiling the Mechanisms and Necessary Conditions Underlying the Emergence of Power Law Distribution

We theorize how peripheral entrepreneurs become field-defining outliers by triggering feedback processes that yield heavy-tailed, i.e., power-law distributed outcomes. Two temporal pathways operate. The evolutionary “many-to-few” path (from outsiders to outliers) starts with broad variation; audience filtering and amplification gradually concentrate success in a few ventures. The leadership “one-to-many” path (from outliers to outsiders) emerges when a pioneer triggers cascades that reset evaluative criteria and rapidly expand network attachment. Through agent-based modelling, we advance a double-sided governance view of category emergence: early endorsers act as de facto rule-makers who codify participation thresholds, structuring subsequent selection environments and raising the odds that an outlier crystallizes. Our research explains how agency links micro action to field-level concentration via four mechanisms, attention-allocation cascades, legitimacy construction, resource-mobilization cascades, and imitation–innovation cycles, that create reinforcing loops moving ventures from peripheral experimentation to central recognition. Our framework explains power-law outcomes and informs research on category emergence, attention and legitimacy, and governance of nascent fields. Vol. 2026, No. 1