Topic

Mental Models

A collection of 47 issues

Hindsight Bias

Hindsight bias is a tendency to look back at past events and perceive events as more predictable then they actually were. For example, there are many ways a global pandemic could have played out, and there was a lot of uncertainty at the beginning. But now it would seem more

Prudential Algebra

Prudential Algebra is a decision making algebra first invented by Ben Franklin. To boil it down it is a balancing act between the pros and cons of all the options involved in the decision stretched in a time frame of a few days. The method as written by Ben Franklin

Barnum Effect

Barnum Effect, also known as Forer Effect, is the tendency to take general statements and interpret it from a personal point of view. A very common example where the Barnum Effect is exploited is in horoscopes and fortune telling. You can commonly see sentences like “When something good lands

WYSIATI

What you see is all there is. Coined by Daniel Kahneman. Even though we like to think of ourselves as rational and objective human beings when making decision. The truth is that we are very well affected by our psychological biases and emotions. WYSIATI is the bias that leads us

If all else equals

A common shortcut our brain takes during comparing two options is to, at least for the moment assume everything else is the same between the 2 options. Hoping to get a more objective judgement of the situation. Occam’s razor, if all else is equal, the simpler explanation is

Theoretical World Generator

A term I came across from Mental Models Vol. 1. But this is something that I have found myself doing and has been useful in helping me make decisions. When presented with a decision that is a) affected by a lot of uncertainty the future holds b) a large set

Judging Decisions

A note on decision making. A decision is good or bad not based on the outcome but based on what information was available at the time the decision was taken and what heuristics were applied to reach a particular decision. Tweets like these are quite common. “If you had

Comparative Advantage

Comparative advantage describes how trading parties will choose to produce more of a good that they have a comparative advantage of, and use that to trade for other goods that they don’t have a comparative advantage in. Comparative advantage forms a foundation for international trade. Comparative advantage is

Lindy Effect

The Lindy effect is a phenomenon where the future life expectancy of an item increases with each year survived. Counter-intuitive as it may seem, there are a few explanations to this effect. The effect mainly applied to non-perishable items. Items that do not have an expiration date governed by unstoppable

Berkson's Paradox

Berkson’s Paradox is a type of sampling bias. This paradox can lead to experimental studies concluding that 2 events are related when they are actually not. This was first identified in case-controlled studies. A study by Sackett(1979) portrays this paradox quite well. He wanted to study the