• Joumana Elomar

20 Mental Models To Flex Your Mind

Mental models are frameworks for thinking. They help us simplify complex situations so we can work through them more easily and make better decisions. Generally speaking, we use mental models to describe any type of concept, framework or worldview that we carry in our minds.


So it's no surprise that they are hundreds that exist. Interestingly, they're also acknowledged to be all be imperfect but useful when applied to the right situation. As historian Yuval Noah Harari puts it, “Scientists generally agree that no theory is 100 percent correct. Thus, the real test of knowledge is not truth, but utility.” So what are some mental models we can use?


20 Mental Models

While there are hundreds that exist, here are 20 of the most useful mental models to be mindful of. Grouped by school of thought, we've ordered them by alphabetical order. So check them out and see which of them you're familiar with!


Psychology

  • Anchoring: A cognitive bias where we rely too heavily on an initial piece of information—the "anchor"—to make a decision.

  • Commitment and consistency bias: A bias where we desire to be and appear consistent with what we have already done. Meaning, we may overlook making a change to appear consistent.

  • Gambler's fallacy: A cognitive distortion when we believe that a certain event is less likely or more likely to happen based on what happened in a previous event. So the classic example is when we flip a coin. After flipping tails 5 times, we might believe we're more likely to see heads.

  • Hyperbolic discounting: Our tendency to choose immediate rewards over future rewards, even when the immediate rewards are smaller.

  • Illusion of control: When we believe we have a sense of control in situations that are inherently random, uncontrollable, unpredictable.

  • Loss aversion: Our tendency to prefer avoiding losses rather than acquiring the equivalent gains. Basically, we're more upset when we lose $50 than we're happy about finding $50.

  • Mere-exposure effect: When we develop a stronger preference for things merely because we are familiar with them. e.g. Preferring our family's version of a dish over your partner's.

  • Status quo bias: Our preference for situations to stay the same. We might take the current situation as a baseline, and see any changes from that baseline as a loss.

  • Survivorship bias: When we focus on people or things that made it past a selection process and overlook those that didn't. One of the biggest biases in the entrepreneurial world!

Thinking

  • Backward chaining: When we work backwards from our goals.

  • First principles: A first principle is a basic assumption that cannot be deduced any further. It's when we break things down to their very base elements. For example, we might ask: What if humanity had never solved this problem, what is the best approach if we reasoned from the fundamental principles? You can watch Elon Musk explain it here.

  • Inversion: When we look at a problem backwards e.g. We might imagine the worst case scenario for our projects and then figure out how not to get there.

  • One level higher: When we ask ourselves "Is it higher-leverage to optimize a level above the one I'm focused on?" e.g. The difference between optimising a cog in a machine vs. the machine itself.

  • Regret-minimisation: A decision making framework where we project ourselves into the future and look back on the decision from that perspective. Using this model, we might ask: What would I regret the most? And we'd prioritise those projects first.

Economics

  • Comparative advantage: The ability to execute a certain economic activity—like making a product—more efficiently than another activity.

  • Economies of scale: The monetary advantage that businesses have in reflection of their scale of operation. Basically, the large the scale, the smaller the cost per unit.

  • Game theory: An umbrella term for the science of logical decision making in humans, animals, and computers.

  • Opportunity-cost: The benefits we lose when we select an alternative over another. This doesn't have to be money. When we ask: what is the opportunity-cost of this scenario? It helps us reason through the options.

  • Pareto Principle: The idea that 80% of our output will come from the top 20% of our inputs. So if we invest in the 20%, we can maximise our gains.

  • Sunk cost fallacy: When we let unrecoverable costs influence our decision-making. For example, you may have enrolled in a 3 year degree and you decide it's not for you but you're a year in and think it would be a waste not to complete it. The 1 year is the sunk cost!

You'll notice that some of these mental models may actually lead to poorer decision-making. While some should be utilised more heavily, there are others we should actively avoid. Namely, cognitive biases. So keep them in mind as you go. So how do we get the most of our mental models?


Making the most of mental models

To make of the most of our mental models, we first need to identify which ones we use. Then, we can reflect on whether they serve us or whether we need to swap some out. A good way to learn new models is to observe those we admire, and try to understand how they make decisions.


To optimise your mental models, here are a few ideas:

  1. Identify your go-to models. What are the mental models you use on a daily basis? What helps you make big decisions? If you find it tricky to narrow it down, choose a situation where you needed to make a call. Reflect on how you made that decision: what kind of questions did you ask yourself? This is meta-cognition in action. So thinking about your thinking! Once you've identified them, have a think about how effective they are and whether swapping them out for a new one might help.

  2. Observe others. If you want to sharpen or expand your mental models, observe people you admire. Try to understand how they make decisions, and how they view problems. You can talk to them about it, or just observe how they approach situations.

  3. Reinforce new ones. If you want to introduce a new mental model, then reinforcing them is really important. Just like a habit, mental models can become automatic with practice. Ideally, we want to be intentional about how we use mental models rather than being enslaved by the automatic ones that our brains so dearly love. For example, let's say you're trying out Opportunity-Costs (Mental Model). You might ask yourself 'What is the opportunity-cost of this situation?' (Behaviour) every time you face a new situation. You'd run the situation through the question, and then observe the result. Then you'd assess how useful the result is! If it was useful, then you'd reinforce that behaviour by systematically asking that question every time you face a new situation. Eventually, it would become more or less automatic.

Tying it together

Mental models are frameworks for thinking. They help us break down situations, and train us to make better decisions. Ideally, we want to be intentional with which models we use on a day-to-day basis as it helps us optimise the way we make decisions in the long run.


 

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