By now, you may already know something about cognitive biases, but you probably haven’t given too much thought to how they interact. Charlie Munger, an incredibly successful investor, coined the Lollapalooza effect to describe the interactions between cognitive biases...
We like to think of human memory in a similar way to a computer’s memory. But this is far from the truth. Unlike machines, encoding a memory requires us to work with how our minds evolved to build memories. We can’t just recall everything we hear or see. The Feynman...
“Patients can have as many diseases as they damn well please.” John Hickam Occam’s Razor implies that the simplest answer is usually the correct one. This is often not the case in the medical profession. The body is a complicated organism with a lot of moving...
The lipstick effect defies what most people would come to expect during an economic downturn. The theory states that during a recession, the sales for lipstick nearly always increase. This has been shown in many cases, and it continues to perplex economists. A few...
Hume’s guillotine is a mental model for separating facts from values. In the words of David Hume himself, “If the cause, assigned for any effect, be not sufficient to produce it, we must either reject that cause, or add to it such qualities as will give it a just...
Hanlon’s Razor is about giving people the benefit of the doubt. Just like many other mental models, it is a tool to help us see past the bounds of our ego. We too often assume the actions of others have to do with us, as if our lives are the ruling factors in theirs....
“When technology moves as fast as it does in a civilization like ours, you get a phenomenon which I call competitive destruction. You know, you have the finest buggy whip factory and all of a sudden in comes this little horseless carriage. And before too many years go...
Occam’s Broom is a play on Occam’s Razor. The term is used to describe the process of sweeping away inconvenient facts when they oppose your view. The term was created by microbiologist, Sydney Brenner, to describe what happens in heated scientific debates. Scientists...
Mental models are tools we use to understand the world and inform our decisions. They help us think outside the box with an eye for the future. It’s not about raw intelligence or even how smart you are. It’s about having the right mental tools to help us make...
Occam’s Razor is a mental model that helps us choose an explanation when there are competing theories. In a nutshell, it claims the theory with the least assumptions is usually the correct one. This mental model is named after William of Ockham, a 14th century friar...
