Mental Models July 9, 2020

What mental model do you often use?

Shiva Prabhakaran @shv_prbhkrn

Share with the mental model that you use most often to make decisions and arrive at rational conclusions.

Example: I use Fundamental attribution error model because it helps me consider reason beyond just "this person is like this hence he might have done it".

What is yours?

  1. 3

    Compounding.

    "It’s been said that Einstein called compounding a wonder of the world. He probably didn’t, but it is a wonder. Compounding is the process by which we add interest to a fixed sum, which then earns interest on the previous sum and the newly added interest, and then earns interest on that amount, and so on ad infinitum. It is an exponential effect, rather than a linear, or additive, effect. Money is not the only thing that compounds; ideas and relationships do as well. In tangible realms, compounding is always subject to physical limits and diminishing returns; intangibles can compound more freely. Compounding also leads to the time value of money, which underlies all of modern finance." - https://fs.blog/mental-models/

    1. 2

      Yeah. Compounding is an excellent model.

      BTW, Farnam Street is great. One of my go-to sources to learn about strategy & decision making.

  2. 2

    Pareto's Principal, all the time. It helps to just do enough work and don't fall into perfectionism trap.
    Also Fundamental Attribution Error should be made popular 🙆‍♂️

    1. 1

      I try to use the Pareto principle too. Harder aspect is to identify what belongs in the 20%.

  3. 1

    I use on a daily basis the rationality bias removal. Great approach to scientific work.

  4. 1

    There are so many...we can only think in mental models, whether they have a name or not.

    Often, when we hear a mental model that better describes the world than our own, it can be life-changing.

    The one I remember most vividly is "Don't be a victim, be a player" by Sheryl Sandberg.

    I was driving to work, listening to a podcast. I was always unsatisfied with my colleagues for not knowing what I was good at back then. Then when I heard this new mental model, it hit a home run. Instantly, it became crystal clear that I've always felt I was a victim of other people's "evil" intentions or negligence, instead of being an equal opponent who works hard to play a better game on the field.