Mental Models Flashcards
What is First Principles Thinking?
Break problems into fundamental truths and build from scratch.
What is Second-Order Thinking?
Consider the long-term and indirect consequences of decisions.
What is Opportunity Cost?
Evaluate what you sacrifice when choosing one option over another.
What is Inversion?
Solve problems by considering the opposite or what you want to avoid.
What is the Pareto Principle (80/20 Rule)?
Focus on the small inputs that yield the majority of results.
What is the Lindy Effect?
Things that have lasted longer are likely to last into the future.
What is Compounding?
Small actions or gains grow exponentially over time.
What is Occam’s Razor?
The simplest solution is often the best one.
What is Hanlon’s Razor?
Don’t attribute to malice what can be explained by ignorance or incompetence.
What is Confirmation Bias?
Avoid only seeking evidence that supports your beliefs.
What is Bayesian Thinking?
Update beliefs as new evidence becomes available.
What is Loss Aversion?
People fear losses more than they value equivalent gains.
What is the Availability Heuristic?
Overestimate the importance of readily available information.
What is Anchoring Bias?
Initial information heavily influences decisions.
What is the Circle of Competence?
Stay within areas where you have deep understanding.
What is Falsifiability?
A good theory must be testable and disprovable.
What is Causation vs. Correlation?
Understand the difference between relationships and actual causes.
What are Feedback Loops?
Positive or negative loops can reinforce or stabilize systems.
What does ‘The Map is Not the Territory’ mean?
Models are simplified representations of reality, not reality itself.
What is Regression to the Mean?
Extreme outcomes are likely to revert closer to the average.
What is Marginal Utility?
The value of an additional unit decreases as you consume more.
What is Game Theory?
Understand strategic decision-making when actions of others matter.
What are Leverage Points?
Small changes in the right places can yield large impacts.
What is the Tragedy of the Commons?
Shared resources are often overused when individuals act in self-interest.
What is Mental Accounting?
People irrationally categorize and treat money or resources differently.
