Ineffective Mental Models

Question 1

Overfitting

Answer 1

Occurs when a model tries to predict something based on noisy data-meaningless data that can’t be interpreted by computer. These models lead to inaccurate data.

I.e. memorizing old exam practice questions instead of learning principles you’ll need for upcoming exam.

Question 2

Anchoring

Answer 2

When you rely to heavily on first impressions or other early irrelevant information as a basis for negotiations.

For example, Amos Tversky & Daniel Kahneman asked one group of study participants if the percentage of African nations in the UN was more or less than 35%. Then asked another group if it was more or less 65%. Both groups used the given number as their anchor later; the first group gave much lower numbers in their estimates.
Inaccurate First impressions are a form of anchoring.
Minimum payments on credit cards are a form of anchoring.

Question 3

Availability bias

Answer 3

Mental shortcut relying on immediate examples/experiences to help make a decision. Assumes that if something can be recalled, then it must be as or more important than other alternative solutions to a problem that don’t have available examples.

Question 4

Shirkey Principle

Answer 4

Institutions will try to preserve the problem that they are the solution too. Turbo Tax consistently lobbied against legislation that would simplify the tax code