Mental Models

Mental Model

Availability Cascade

The Availability Cascade describes how repeated exposure to an idea amplifies its perceived truth and importance.

Cognitive BiasPerceptionSocial Influence
Mental Model

Availability Heuristic

The Availability Heuristic describes the tendency to rely on readily available information when making decisions.

Cognitive BiasDecision MakingPerception
Mental Model

Bayesian Reasoning

Bayesian Reasoning updates probabilities based on new evidence using Bayes' Theorem.

StatisticsDecision MakingProbability
Mental Model

Bayesian Thinking

Bayesian Thinking uses probability to update beliefs based on new evidence, emphasizing continuous learning.

ProbabilityDecision MakingData Analysis
Mental Model

The Bystander Effect

The Bystander Effect refers to the phenomenon where individuals are less likely to help in emergencies when others are present.

Social PsychologyGroup BehaviorDecision Making
Mental Model

Circle of Competence

The Circle of Competence emphasizes focusing decisions and actions within areas of expertise while avoiding areas of ignorance.

Decision MakingSelf-AwarenessInvestment
Mental Model

The Cobra Effect

The Cobra Effect describes unintended negative consequences of well-intentioned policies or incentives.

Decision MakingUnintended ConsequencesPolicy Design
Mental Model

Compounding

Compounding is the process where the value of an investment grows exponentially over time as returns generate further returns.

MathematicsFinanceGrowth
Mental Model

Confirmation Bias

Confirmation Bias is the tendency to favor information that confirms existing beliefs while ignoring contradictory evidence.

PsychologyDecision MakingCritical Thinking
Mental Model

Creative Destruction

Creative Destruction describes the process by which innovation replaces outdated industries, driving economic progress.

EconomicsInnovationStrategy
Mental Model

Dunning-Kruger Effect

The Dunning-Kruger Effect describes how individuals with low expertise overestimate their competence, while experts may underestimate theirs.

Cognitive BiasSelf-AwarenessLearning
Mental Model

Feedback Loops

Feedback Loops describe cyclical cause-and-effect relationships in systems, reinforcing or balancing behaviors.

Systems ThinkingDecision MakingDynamics
Mental Model

First Principles Thinking

First Principles Thinking involves breaking down complex problems into fundamental truths and reasoning from the ground up.

Critical ThinkingProblem SolvingInnovation
Mental Model

Framing Effect

The Framing Effect occurs when the presentation of information influences decisions and judgments.

Cognitive BiasDecision MakingCommunication
Mental Model

Game Theory

Game Theory studies strategic interactions where the outcome depends on the decisions of multiple players.

Strategic ThinkingDecision MakingMathematics
Mental Model

Hanlon’s Razor

Hanlon’s Razor advises against attributing to malice what can be explained by ignorance or incompetence.

Critical ThinkingAssumptionsProblem Solving
Mental Model

Hindsight Bias

Hindsight Bias is the tendency to believe, after an event has occurred, that the outcome was predictable all along.

Cognitive BiasDecision MakingLearning
Mental Model

Hyperbolic Discounting

Hyperbolic Discounting explains why people prefer smaller, immediate rewards over larger, delayed ones.

Cognitive BiasDecision MakingBehavioral Economics
Mental Model

Incentive-Caused Bias

Incentive-Caused Bias occurs when individuals are influenced by their incentives, leading to biased decisions or actions.

Behavioral PsychologyDecision MakingEconomics
Mental Model

Incentives

Incentives are rewards or penalties that influence behavior and decision-making.

EconomicsBehavioral PsychologyMotivation
Mental Model

Inversion Thinking

Inversion Thinking involves approaching problems by imagining the opposite outcome and reasoning backward to prevent it.

Critical ThinkingProblem SolvingReverse Engineering
Mental Model

Law of Diminishing Returns

The Law of Diminishing Returns states that adding more resources to a process eventually results in lower incremental output.

EconomicsDecision MakingEfficiency
Mental Model

Law of Large Numbers

The Law of Large Numbers states that as a sample size increases, its average becomes closer to the population mean.

MathematicsStatisticsDecision Making
Mental Model

The Lindy Effect

The Lindy Effect suggests that the longer something has existed, the longer it is likely to persist.

LongevityDecision MakingProbability
Mental Model

Marginal Utility

Marginal Utility measures the additional satisfaction gained from consuming one more unit of a good or service.

EconomicsDecision MakingOptimization
Mental Model

Mean Reversion

Mean Reversion is the tendency for values to return to their historical average over time.

StatisticsInvestmentBehavioral Finance
Mental Model

Mental Models

Mental Models are frameworks or lenses through which individuals view and understand the world.

Critical ThinkingDecision MakingFrameworks
Mental Model

Nash Equilibrium

Nash Equilibrium occurs when players in a game choose strategies that no one benefits from changing unilaterally.

Game TheoryDecision MakingStrategy
Mental Model

Network Effects

Network Effects occur when the value of a product or service increases as more people use it.

EconomicsTechnologyStrategy
Mental Model

Occam’s Razor

Occam’s Razor suggests that the simplest explanation with the fewest assumptions is usually the correct one.

PhilosophyProblem SolvingSimplification
Mental Model

OODA Loop

The OODA Loop (Observe, Orient, Decide, Act) is a decision-making framework emphasizing speed and adaptability.

Decision MakingStrategyAgility
Mental Model

Opportunity Cost

Opportunity Cost represents the value of the next best alternative that must be forgone to pursue a particular action.

EconomicsDecision MakingScarcity
Mental Model

The Pareto Principle

The Pareto Principle, or the 80/20 rule, states that 80% of outcomes result from 20% of causes.

EfficiencyDecision MakingProductivity
Mental Model

Pavlovian Conditioning

Pavlovian Conditioning, or classical conditioning, involves learning through associations between stimuli and responses.

PsychologyBehavioral ScienceLearning
Mental Model

Prisoner's Dilemma

The Prisoner's Dilemma illustrates how two individuals acting in their own self-interest can lead to suboptimal outcomes for both.

Game TheoryDecision MakingStrategy
Mental Model

Reciprocity

Reciprocity is the social norm where people feel obligated to return favors or acts of kindness.

PsychologySocial DynamicsInfluence
Mental Model

Second-Order Thinking

Second-Order Thinking focuses on anticipating the long-term consequences of decisions and understanding their ripple effects.

Critical ThinkingDecision MakingSystems Thinking
Mental Model

Social Proof

Social Proof describes the tendency to conform to the actions of others when making decisions, especially in uncertain situations.

PsychologyBehavioral ScienceDecision Making
Mental Model

Sunk Cost Fallacy

The Sunk Cost Fallacy is the tendency to continue investing in a failing endeavor because of previously invested resources.

Cognitive BiasDecision MakingBehavioral Economics
Mental Model

Survivorship Bias

Survivorship Bias occurs when analysis focuses only on successful outcomes, ignoring failures.

Cognitive BiasDecision MakingStatistical Analysis
Mental Model

The Map Is Not the Territory

This model reminds us that representations (maps) are abstractions and not the reality they represent.

Critical ThinkingPerceptionAbstraction
Mental Model

Tragedy of the Commons

The Tragedy of the Commons explains how individuals acting in their self-interest can deplete shared resources.

EconomicsEnvironmental ScienceResource Management
Mental Model

Anchoring Bias

Anchoring Bias describes the tendency to rely too heavily on the first piece of information (the anchor) when making decisions.

Cognitive BiasNegotiationDecision Making
Mental Model

Authority Bias

Authority Bias refers to the tendency to overvalue the opinions or instructions of perceived authority figures.

PsychologyBehavioral ScienceDecision Making
Mental Model

Halo Effect

The halo effect is a cognitive bias...

Cognitive BiasPsychologyDecision Making