Diminishing Returns vs Increasing Returns
The decision is obviously localized to the game and requires a significant amount of background to answer objectively.

The important distinction between the two is this: diminishing returns is easy, but amplifying returns is hard.

When you have diminishing returns, you introduce two elements. 


The first is resourcefulness (no pun intended). If you can only do the same thing 2 or 3 times before it becomes worthless, you (as a player) need to structure your play such that you don't rely on a single mechanic. 
The second is awareness of what your opponents play. If two people have played water already, you really should do something else with your hydrogen. But this means you have to be very aware of who has played water, who is set up to play water again soon, and what options you have with your water components.


When you have amplifying returns, you introduce a different set of elements. 


The first is that you have a huge risk of being bah-roken. Magic: the Gathering's two most broken mechanics were Storm and Affinity. Storm copied a spell for every spell played before it this turn (majorly amplified!) and Affinity made artifacts cost 1 less for every artifact on the board (allowing you to play things that should be out on turn 8 on turn 3 or even sooner!) The amplification effects in Magic are strictly regulated and playtested to death before being released because of how powerful they've been in the past. Typically, they're prohibitively expensive or fragile to be used in competitive play, as otherwise they would easily dominate the format.
The second is that your players will probably focus on them. Most casual players like big things. If this gets big fast, they're going to go for it. You must be careful not to make your game all about these 2 or 3 mechanics that explode super fast, or your game will run out of steam.


So in summary, diminishing returns put a lot of work on the designer not to make the game a chore to play, while amplifying returns put a lot of work on the designer to make the game last long enough to be fun for everyone in the game.

I would recommend using linear acceleration or deceleration in whatever one you pick (if anything) as using anything higher than that explodes in value after only a few iterations, and obviously the safest thing to do is to not have it. A core tenant of game design is that the game should have as few mechanics as necessary to make the game fun.