Mental Models: The Best Way to Make Intelligent Decisions (113 Models Explained)


#1

When solving problems the first thing I (try to) do is ask myself is do I have direct experience with this and what does the book say. If both experience and the book are in agreement then likely I’m on solid ground. But problems arise where the experience of others must be relied upon and/or the book is not available.

This is some tools that can be used to evaluate information outside one’s own area of expertise.

Mental Models: The Best Way to Make Intelligent Decisions (113 Models Explained)

The idea for building a “latticework” of mental models comes from Charlie Munger, Vice Chairman of Berkshire Hathaway and one of the finest thinkers in the world.

As with physical tools, the lack of a mental tool at a crucial moment can lead to a bad result, and the use of a wrong mental tool is even worse.

If this seems self-evident, it’s actually a very unnatural way to think. Without the right training, most minds take the wrong approach. They prefer to solve problems by asking: Which ideas do I already love and know deeply, and how can I apply them to the situation at hand? Psychologists call this tendency the “Availability Heuristic” and its power is well documented.

You know the adage “To the man with only a hammer, everything starts looking like a nail.” Such narrow-minded thinking feels entirely natural to us, but it leads to far too many misjudgments. You probably do it every single day without knowing it.


#2

The Fox And The Hedgehog: The Triumphs And Perils Of Going Big

The Greek poet Archilochus wrote, “the fox knows many things, but the hedgehog knows one big thing.”

Psychologist Phil Tetlock thinks the parable of the fox and the hedgehog represents two different cognitive styles. “The hedgehogs are more the big idea people, more decisive,” while the foxes are more accepting of nuance, more open to using different approaches with different problems.
Renee Klahr

Tetlock is the author of Superforecasting: The Art and Science of Prediction


#3

The Relativity of Wrong By Isaac Asimov

This is an article navigators can appreciate. Plane Sailing uses the assumption the earth is flat.

“Plane Sailing is usually defined to be the art of navigating a ship on the supposition that the earth is a plane … .”- J.R. Young, “Navigation and Nautical Astronomy”

Many problems can be solved assuming the earth is flat, doesn’t work for Great Circle.

This is from Asimov:

Nowadays, of course, we are taught that the flat-earth theory is wrong; that it is all wrong, terribly wrong, absolutely. But it isn’t. The curvature of the earth is nearly 0 per mile, so that although the flat-earth theory is wrong, it happens to be nearly right. That’s why the theory lasted so long.

The curvature of such a sphere is about 0.000126 per mile, a quantity very close to 0 per mile, as you can see, and one not easily measured by the techniques at the disposal of the ancients. The tiny difference between 0 and 0.000126 accounts for the fact that it took so long to pass from the flat earth to the spherical earth.


#4

Archilochus was an interesting and complex guy: poet, wanderer, mercenary soldier and satirist. The line he quotes is the only one that survives from that particular poem. I like to suggest that given the personality he shows in his other work, it’s possible that the following line was something like “and that one big thing is wrong.” One of the classicists who studied him thinks he identified with the fox. Since he had extensive field experience as a mercenary, it’s quite possible he knew that foxes kill hedgehogs all time.

Cheers,

Earl


#6

Complexity Bias: Why We Prefer Complicated to Simple - from Farnam Street.

Why we have tea ceremonies, conspiracy theories and why pigeons are superstitious.


#7

Another article about Munger How Warren Buffett’s billionaire deputy became an “expert-generalist”

Both links came from the investing site The Big Picture.


#8

Interesting post. I’ve shared an easy to remember model for decision making at sea (http://www.parani.org/Blog/port-or-starboard-decision-making-on-the-high-seas). Simple to remember for seafarers.


#9

@vsp - That’s a good post. I liked the graphic with the shoal areas and the buoys. I’ve noticed that we often make non-time critical decisions without even realizing we are in fact making decisions. Sometimes need to slow down, go into hand steering and navigate with care.