You Unlocked 50+ mental models

Imagine a person who holds a strong political opinion and assumes that most of their friends and colleagues share the same view. They may be surprised and even offended when they find out that most of their peers disagree with them, because they were under the false belief that their opinion was the consensus. This can also lead to a lack of understanding and difficulty in communication with people who don't agree with them.

An analogy for this phenomenon would be a person who is not skilled in car repairs but believes they are a great mechanic and insists on trying to fix their own car. Despite their confidence, they are unable to diagnose or fix the problem and end up causing further damage to the car. This is similar to how someone with a lack of knowledge in a certain area may overestimate their own understanding and make mistakes that end up costing more time or resources.

Imagine that you are planning a trip to a new city that you have never visited before. You might use a map of the city to help you navigate and plan your route. However, it is important to recognize that the map is not the same as the city itself. There may be streets or landmarks that are not shown on the map, or the map may not accurately represent the current layout of the city.

An analogy for this model would be a person who wants to improve their fitness. Instead of trying to make drastic changes to their exercise and diet routine, they make small changes every day. For example, they may start by taking the stairs instead of the elevator, and then gradually increase the intensity and duration of their workouts over time. By making small improvements on a regular basis, they are able to achieve their fitness goals in a sustainable way. It's a continuous improvement technique that encourages small, incremental improvements over time.

For example, if you are trying to fix a leaky faucet and your mental framework is that you need to use a specific type of tool (e.g. a wrench), you may struggle to find a solution if the problem cannot be fixed with a wrench. By being aware of your own mental frameworks and being open to new perspectives and approaches, you may be able to come up with a more creative solution.

Pinpoint and strategically manage essential limitations in your projects, focusing your efforts on resource optimization for enhanced efficiency.

An example would be a person who is managing their time. They find that 80% of their productivity comes from 20% of their activities. For example, they may find that most of their work is done during the first half of the day, and only a small portion of their tasks are done in the afternoon. This person can use this knowledge to optimize their schedule to work on the most important tasks when they are most productive, and so on.

Let's think of a person who is known for being attractive. They may be viewed as more intelligent, kind, and successful than they actually are, because people's perceptions are influenced by the halo effect of their physical appearance. It's the tendency to form an overall impression of a person based on one or two characteristics and to assume that this impression is representative of the person as a whole.

Imagine a person going to a car dealership to buy a new car. The salesperson shows them a high-end luxury car that is priced at $50,000 and the person becomes anchored to that price. Even if the salesperson shows them a less expensive and more affordable car, the person may still believe that the less expensive car is overpriced because it is anchored to the initial high price of the luxury car. It's the tendency to rely too heavily on the first piece of information encountered when making decisions.

Imagine a person who has recently heard a lot of news stories about shark attacks, and as a result, overestimates the likelihood of being attacked by a shark while swimming in the ocean. They may avoid swimming in the ocean even though the actual risk of a shark attack is low, because the news stories of shark attacks are more salient and available in their memory. It's the tendency to overestimate the likelihood of an event based on how easily it comes to mind.

An example of this fallacy would be a political candidate who argues that voters must choose between their economic plan or their opponent's economic plan, implying that there are no other options or alternatives available. In reality, there may be other economic plans or ideas that have not been considered or presented, and voters should not be limited to just two options. This type of reasoning can be seen in many political debates or discussions where the options presented are limited and oversimplified, and it can prevent the public from considering a more nuanced or complete view of the problem.

An analogy for this would be a teacher who believes that a certain student is not capable of succeeding in their class. As a result, the teacher may not provide the student with the same level of attention or support as other students. The student, feeling unsupported, may not put in as much effort or perform as well as they could have. This ultimately confirms the teacher's initial belief that the student was not capable of succeeding, and creates a self-fulfilling prophecy.

Pay attention to the beginning and end of each chapter or section: These are often the most important parts and may contain key points or summarizing statements that can help you understand the main ideas being conveyed.

In financial markets, many investors believe that they would have been able to predict the stock market crash of 2008, but in reality, there were few signs that the crash was imminent before it occurred. After the fact, many investors look back and point to signs that they believe should have been obvious, such as the housing market bubble or the high levels of debt held by financial institutions. But in reality, the crash could not have been predicted with any certainty. This bias can lead to overconfidence in one's ability to predict future events and make investment decisions.

Imagine a person who is giving a presentation. At first, they may be quite nervous and anxious, which leads to a low level of performance. As they begin to speak and become more comfortable, their performance improves. However, if they become too nervous and anxious, their performance will begin to decline and may even become worse than at the beginning of the presentation. This is an example of the inverted-U theory in action, where moderate level of arousal leads to optimal performance.

An analogy for this model would be a person who is more likely to remember the negative comments made by a friend or coworker, rather than the positive ones. This person may dwell on the negative comments and let them affect their mood and perception of the relationship, while the positive comments are quickly forgotten. It's the tendency for individuals to pay more attention to negative information and experiences than positive ones.

Think of a sports player who attributes their victories to their own personal skill and effort, but attributes their losses to external factors such as the referee's bad call or poor weather conditions. This way of thinking can lead to a lack of self-reflection and improvement, as they are not taking responsibility for their own performance. This can hinder their progress and prevent them from reaching their full potential.

As a farmer adds more and more labor and capital to a piece of land, they will see an increase in crop yields up to a point. However, at some point, adding more labor and capital will no longer result in a proportional increase in crop yields. For example, if a farmer uses one worker to farm one acre of land, they will see a certain level of crop yield. Adding a second worker to that same acre of land will increase the yield, but not as much as the first worker did, and adding a third worker will increase the yield even less. This happens because the additional workers are not able to find as much unused land or resources as the first worker did, so their productivity decreases. This is why farmers will often lease or buy more land to spread out their workers and resources instead of adding more to one piece of land.

The Nudge theory is a concept in behavioral economics that proposes that small, subtle changes in the environment can influence people's decisions and behavior. An example of this is the use of "default options" in forms and registration processes. For example, when signing up for a new service, the default option may be to opt-in to receiving marketing emails. Research has shown that people are more likely to stick with the default option, rather than actively choosing to opt-out. By making the default option the desired behavior (in this case, opting in to marketing emails), the company is using a "nudge" to influence the customer's decision. This is a simple example of how the Nudge theory can be applied in real-life situations to influence behavior in a desired way.

It states that "work expands to fill the time available for its completion." An example of this is in the workplace, where an employee is given a deadline to complete a task. They may take the entire time allocated to complete the task, even if it could have been finished much sooner. This phenomenon can be observed in many workplaces, where tasks and projects are completed at the last minute, rather than being finished ahead of schedule. This can lead to a sense of urgency and stress, as well as lower productivity and efficiency.

The Rule of Three is a principle that suggests that things that come in threes are inherently more satisfying, appealing, and effective. and example of this is in advertising and marketing. A common advertising technique is to list three benefits or features of a product in order to appeal to potential customers. For example, a car advertisement may list the car's fuel efficiency, safety features, and luxury amenities. By listing three benefits, the advertisement creates a sense of completeness and makes the product more appealing to potential buyers.

A example of this is how people often choose the easiest or most convenient option when faced with a decision. For example, when a person wants to buy a product, they will often choose the option that requires the least amount of effort to obtain. This could mean purchasing the item online rather than going to a physical store, or choosing a product that is on sale rather than one that is full price. Similarly, when faced with multiple tasks, people will often choose to complete the easiest task first, rather than tackling the most difficult or important task.

This principle states that actions taken by individuals or organizations can have unforeseen and unintended results. One real-life example of this is the introduction of non-native species to new environments. In many cases, these species are brought in with the intention of providing some sort of benefit, such as controlling pests or providing new food sources. However, the non-native species can end up causing harm to the native ecosystem by outcompeting native species for resources, spreading disease, or altering the environment in other ways.

In a corporate meeting where the agenda includes both discussing the company's overall strategic plan for the next year and choosing a new office coffee brand. During the meeting, the majority of the time is spent discussing the details of the new coffee brand, such as the type of beans, the brand and the cost, while the strategic plan is only briefly discussed and not much time is spent to deliberate on it. This is an example of how the law of triviality can lead a group to focus on minor details while neglecting more important matters.

Action bias is the tendency to take action, even when it is not necessary or when no action is the best course of action. An example of this is a stock trader who continues to make trades even when the market is showing no clear trend or when there is a high level of uncertainty. The trader may feel pressure to take action in order to justify their job or to avoid the perception of being inactive. Despite this, the best course of action in these situations is often to wait and not make any trades. This bias can lead to unnecessary losses and poor investment decisions.

Ihsan is an Islamic concept that refers to the act of doing good and having a positive impact on others. It is often translated as "excellence" or "perfection." One example of the Ihsan model in action is through acts of charity and philanthropy. For example, a person who donates a portion of their wealth to help those in need or volunteers their time to assist in community service projects is demonstrating the principles of Ihsan. Additionally, a business that prioritizes ethical and fair treatment of employees and engages in environmentally friendly practices could also be considered an example of the Ihsan model in action.

The mere-exposure effect is the phenomenon by which people tend to develop a preference for things simply because they are familiar with them. A real-life example of this is advertising. Companies often use repetition in their advertising campaigns to increase brand recognition and familiarity among consumers. This can lead to a positive bias towards their products, even if the products themselves are not necessarily better than their competitors. For example, a consumer might choose a certain brand of soft drink simply because they have seen the brand advertised more often than other brands, even if they have never tried it before and have no knowledge of its taste, quality or nutritional value.

When a person is feeling stressed or overwhelmed with work. Instead of dwelling on the negative thoughts and feelings, they reframe their perspective by focusing on the positive aspects of their job and the progress they have made. For example, instead of thinking "I have so much work to do, I'll never finish it all," they reframe it to "I have a lot of work to do, but I am capable of completing it and it will help me achieve my goals." This shift in perspective can help the person feel more motivated and in control of the situation, instead of feeling defeated and stressed.

The Antifragile Model, as proposed by Nassim Nicholas Taleb, is a concept that suggests that some things benefit from stressors and shocks, rather than being harmed by them. In personal life, this concept can be applied in various ways to improve overall well-being and resilience. One example of how to use the Antifragile Model in personal life is to view exercise as a stressor that makes the body stronger. Regular physical activity can help build muscle, improve cardiovascular health, and boost overall fitness. The body adapts to the stressors of exercise, becoming stronger and more resilient over time.

It's a concept in economics that refers to a state in which it is not possible to make any one person better off without making someone else worse off. A real-life example of Pareto efficiency can be seen in a situation where a company has limited resources and must allocate them among different departments. If any reallocation of resources would lead to one department gaining at the expense of another department, then the company is operating at a Pareto efficient point.

Mental accounting is the tendency for people to separate their money into different "mental accounts" based on its intended use or the source from which it came. An example of this is when people treat money they received as a bonus from their employer differently than money they earned from their regular salary. They might be more likely to spend the bonus money on a luxury item or a vacation, while the money from their salary is reserved for bills and other necessities. This can lead to irrational spending decisions, as the money is still the same regardless of its source, but the way it is mentally categorized can affect how people perceive its value and use it.

It's a phenomenon where individuals acting in their own self-interest can lead to the depletion or degradation of a shared resource. An example of this is overfishing in the oceans. Fishermen, acting independently and rationally, are motivated to catch as many fish as possible in order to make a profit. However, if too many fishermen are catching too many fish, the fish population can become depleted. This means that there are fewer fish for everyone to catch, and the resource becomes less valuable for all. As a result, some species of fish are now endangered and it's affecting the whole ecosystem. This can also lead to economic losses for the fishing industry and coastal communities that depend on it.

Loss aversion is a behavioral economic concept that describes how people place a greater value on avoiding losses than on acquiring gains. A real-life example of this is an individual who has invested in the stock market. They have bought a stock at $50 and now the value of stock has dropped to $45. Even though the stock has the potential to rise again, the individual may be hesitant to sell at a loss. They may hold on to the stock, even as its value continues to decline, because they feel a strong aversion to the idea of losing money. This can result in them losing more money in the long run.

The norm of reciprocity is the expectation that people will reciprocate when they receive something from others. An example of this is when a person receives a gift from someone and feels obligated to give a gift in return. This can be seen in many different scenarios such as: In a business setting, a salesperson may give a potential customer a small gift, such as a pen or a keychain, in the hopes that the customer will feel obligated to buy something from them. In a social setting, a friend may invite another friend to their home for dinner and the second friend may feel compelled to invite the first friend over for dinner in return.

An example of a growth mindset can be seen in the story of Michael Jordan, one of the greatest basketball players of all time. Despite being cut from his high school basketball team, Jordan didn't give up on his dream of becoming a professional player. Instead, he used the setback as motivation to work harder and improve his skills. He spent countless hours practicing and honing his craft, eventually becoming one of the most dominant players in the NBA. Through his determination and persistence, Jordan demonstrated the power of a growth mindset, showing that with hard work and dedication, anyone can achieve their goals.

Ockham's Razor is a principle stating that, when presented with multiple explanations for a phenomenon, one should choose the explanation that makes the fewest number of assumptions. An example of this principle in action is in the field of medical diagnosis. When a patient presents with symptoms, a doctor may consider multiple potential diagnoses. Ockham's Razor would dictate that the doctor should select the diagnosis that requires the fewest number of additional tests or assumptions about the patient's health.

An example of this would be during a job interview. Candidates may be asked about their weaknesses, but they may not want to admit to any, as they believe this would make them appear less attractive as a candidate. Instead, they might give a response that is socially desirable, such as "I'm a perfectionist" or "I work too hard." This can make it difficult for the interviewer to get an accurate sense of the candidate's true strengths and weaknesses and may lead to hiring decisions that are not based on the best fit for the position.

Imagine that you have purchased tickets to a concert that you are no longer interested in attending. The tickets represent a sunk cost (i.e. money that you have already spent and cannot get back). You might be tempted to go to the concert anyway because you do not want to "waste" the money you have already spent on the tickets. However, the mental model of sunk costs suggests that you should consider the expected future benefits (e.g. enjoyment from the concert) rather than the sunk cost when making your decision. If you do not expect to enjoy the concert, it may be more rational to sell the tickets or give them away rather than attend the concert.

The theory of the second best is the idea that in situations where one aspect of a system is not optimal, the overall performance of the system may not be improved by trying to fix that one aspect alone. A short and simple example of this theory in real life would be a city's public transportation system. Imagine a city that has a bus system that is not running on time. The city decides to invest in a new GPS system for the buses to improve their punctuality. However, if the city's roads are in poor condition and there is heavy traffic, the new GPS system alone may not significantly improve the buses' punctuality.

Resilience can be compared to a rubber band. Just as a rubber band can be stretched and pulled, a person can also be stretched and pulled by stressors and challenges in life. However, just as a rubber band will eventually return to its original shape, a resilient person will also be able to bounce back and recover from those challenges. Additionally, a rubber band can become stronger with regular use and stretching, just as a person can also become more resilient through the challenges and difficulties they face.

It refers to the benefits a company can gain by being the first to enter a market or develop a new product. An example of this is the company Amazon. Amazon was one of the first companies to enter the online retail market and establish a strong brand and customer base. This allowed them to build a large distribution network, gain economies of scale, and invest heavily in technology, which helped them to lower their costs and offer a wider variety of products. As a result, they were able to establish a dominant market position and make it difficult for new competitors to enter the market. This is the first mover advantage that Amazon has had over the years.

The Johari Window is a model for understanding self-awareness and interpersonal communication. It is divided into four quadrants: the open self, the hidden self, the blind self, and the unknown self. An example of the Johari Window in action could be a job interview. During the interview, the candidate's open self would include information that they choose to share with the interviewer, such as their qualifications and work experience. The hidden self would include information that the candidate knows about themselves, but chooses not to share, such as a past mistake or a weakness. The blind self would include information that the candidate is not aware of, but the interviewer may observe, such as body language or tone of voice. The unknown self would include information that neither the candidate nor the interviewer is aware of, such as potential or hidden talents. The Johari Window model can also be used in personal and professional relationships, to improve communication and self-awareness.

A student named Sarah is struggling in her math class. She has always found math difficult and has low self-efficacy in her math abilities. She believes that she is not good at math and will never be able to understand it. Her teacher notices her struggles and offers extra help after school. Sarah is hesitant at first, but decides to take the opportunity. With the extra help, she begins to understand the concepts better and starts to see progress in her grades. As she continues to improve, her self-efficacy in her math abilities also increases. She starts to believe that she can do well in math and that she is capable of understanding it.

Imagine a student who doesn't study for an exam because they "know they will do bad anyway" or an athlete who skips practice because they are "not in the right mood". By not putting in the effort, they can attribute any failure or poor performance to the obstacle they created for themselves, rather than their own lack of effort or skill. This behavior can be detrimental in the long run as it can create a cycle of avoiding challenges, and limit the person's ability to improve and reach their full potential.

Imagine that you are worried about the future and unsure of what steps to take next. To apply the mental model of Tawakkul, you might: Reflect on your values and goals and try to focus on the present moment Trust that God has a plan for you and try to let go of excessive worry Do your best in your current circumstances and have faith that things will work out as they are meant to.

In a romantic relationship, where a couple has built trust, respect and love by communicating openly and showing appreciation for each other. However, when one partner makes a mistake like lying, it can damage the trust and the emotional bank account. But by making amends and rebuilding trust, the relationship can strengthen the emotional bank account.

Recognize the boundaries of your influence in uncertain situations, fostering more realistic evaluations and informed choices in your entrepreneurial journey.

Cognitive dissonance is the mental discomfort or stress experienced by a person who holds two or more contradictory beliefs, ideas, or values. An example of this is a person who smokes cigarettes but also believes that smoking is harmful to their health. In this case, the person's belief that smoking is harmful creates dissonance with their behavior of actually smoking. To reduce this discomfort, the person may rationalize their behavior by telling themselves that smoking is not as bad as they thought, or that they will quit soon.

Sidestep decision-making biases by actively seeking diverse perspectives, ensuring a more balanced and accurate analysis for your business strategies.