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You've got to have models in your head. And you've got to array your experience—both vicarious and direct—on this latticework of models.

Charlie Munger on mental models

Welcome to WikiLogic, a site dedicated to listing and exploring the world's most useful mental models. Please have a look around, and add any models you find useful!

Mental Models Economics The power of free markets to be dramatically more efficient than central planning. Moral hazard, the brutality of open markets, and precedent setting of bailouts The power of incentives, monetary or otherwise, all across life (e.g. parents' downside-only position in freedom of kids) The best way to have X is to deserve X (eg a good spouse, trust, that job) (this is somewhat Economics, somewhat Life) Business Economies of scale -- internal specialization, bulk purchasing power, leverage in best practices Diseconomies of scale -- can't address niche markets, bureaucracy Circle of competence (investing) Decision trees Engineering / Systems Engineering The Law of Unintended Consequences Abstraction of complexity / modularity of components Redundancy and backups Carrying capacity, queuing theory Logic / misc Correlation vs causation Persuade xor discover What cannot go on forever, must stop. Sample bias Experiment design Sometimes, Fast is slow and slow is fast. The idea that knowing a name for something doesn't mean you know anything about that thing (a la Feynmann), and that names/words are just arbitrary and sometimes cause confusion when people are using slightly different definitions for something where there is no fundamental disagreement "If the path to victory is not clear, do nothing." -Shogun Train harder than you fight Sometimes reactions swing too far in the other direction, and have to come back to center (e.g. vulgarity in rap lyrics, hippy thinking in the 70's) Favorite philosophy Keep your identity small (a la Paul Graham and/or Paul Buchheit) You can only be good to yourself AND good to others, or neither (a la Paul Buchheit) Interesting way of thinking about work and personal improvement and health and everything else: working for your future self Where people often go wrong Confusing the way things are with the way you wish they were. Differentiating just plain bad vs bad, but a sign of a good thing (thinking through second-order effects) Dimensions some people tend to be biased on How much (and when) one takes responsibility for others' emotions Tendency to over- or under- bake things (advice is either "done is better than perfect" or __?__, respectively) Market Disruption / Innovation Differentiating on important dimensions (blue ocean strategy) Shifts in platforms often open window for new entrants (e.g. MS Office with GUI's) Proxies for demand What's new in the world that's enabling the innovation? Barriers to entry / network effects / fragmented vs consolidated incumbents Rich customers, not competing on price Psychology Technology And Courage -- the immense courage needed to do innovative work, and tools for building courage The irrationality of humans, e.g. Cialdini's Influence: social proof, reciprocity, consistency bias, authority, friendship, scarcity bias, social distance Confabulation, i.e. people don't know why they do what they do, and the bias to attribute others' actions to their nature while attributing our own actions to our circumstances People are affected by their environment moreso than basic character. This is part of Cialdini, but worth breaking out into its own point. E.g. with the no-poach fiasco in Silicon Valley. E.g. the Stanford prision experiment. How slow changes over long periods of time are underestimated and tend to result in irrational inaction (Boiling frog) Ideas from negotiation, e.g. anchoring. Wikipedia List of Cognitive Biases Paradox of choice Social capital decays (for example, if I do something big and one time for you in exchange for you doing something small over a long time for me, you will feel like you got the worse end of the bargain) People will often do things for free that they won't do for small amounts of money Joint v.s. separate evaluation (Distinction Bias) Being good: "PERMA" = Positive Emotion, Relationships, Meaning, Accomplishment Face reality Past is prologue (this is an anecdote to things like learned helplessness, ___?) The "prediction paradox": The more humility we have about our ability to make predictions, the more successful we can be in making predictions / planning for the future Conflict has a certain shape that makes it attract a particularly higher amount of mental attention than it should Pavlovian associations Liking familiarity -- e.g. in branding Picture superiority effect Legitimacy exchange -- e.g. at burning man the hippies and engineers exchanging legitimacy Political Science (International security) People tend to overestimate the degree to which their adversary's actions are coordinated. Balance of powers (e.g. legislative, executive, and judicial branches) Biology Evolution / survival of the fittest Math Basic probability -- Gaussian distributions, independence versus non-independence Game theory, equilibria A list here of general techniques Map of math tools Exponential growth results from growth fueled in proportion to current levels (e.g. the solution to dx/dt = k*x is x = e^t) Statistics / machine learning Overfitting / reading too much into limited data Explore versus exploit Management Science The Pareto principle, 80/20 rule Work expands to fill the time allowed for it What gets measured gets done, and incentives Physics Critical mass / tipping points Electrical Engineering Feedback loops: positive and negative Control systems, impulse response Robustness principle / static discipline: be conservative in what you output, liberal in what you accept Social It's okay/natural for not everyone to like you. 1/3rd of people will like you, 1/3rd will think you're okay, 1/3rd will not care for you Writing / communication (these don't really fit because they're more tactics than models) Use stories Speak in the first person ("I ...") Big picture before details. Meaning before details. Have an antagonist. This creates a narrative. Educate about things broadly and inform re your stuff, simultaneously. (related: show knowledge superiority.) Put numbers in terms that are easy to relate to Use imagery Create moments of surprise What is the one big idea you want to leave with your audience? It should be short, memorable, and in subject-verb-object sequence. (E.g. Apple reinvents the phone) Product Design Closed v.s. open design space (constraints/approaches relatively known v.s. unknown) Ecology Environment carrying capacities Predactor / prey relationships Symbiosis -- mutualism, parasitism Explore vs exploit (this is a useful idea in ai as well) Specialization Typically Weak Mental Models

Case Studies Explaining Cigarettes Predicting Predicting Income Inequality Designing Creating Concern Over Global Warming What's Going On Here? Explaining vs Predicting vs Designing What Makes a Good Model? Charlie Munger on Mental Models Other Sites Farnam Street Paul Graham on general truths Think Mental Models