jebmo’s posthaven

Mental Models I Find Repeatedly Useful

Around 2003 I came across Charlie Munger’s 1995 speech, The Psychology of Human Misjudgment, which introduced me to how behavioral economics can be applied in business and investing. More profoundly, though, it opened my mind to the power of seeking out and applying mental models across a wide array of disciplines.

A mental model is just a concept you can use to help try to explain things (e.g. Ockham’s Razor — “the simplest solution is usually the correct one”). There are tens of thousands of mental models, and every discipline has their own set that you can learn through coursework, mentorship, or first-hand experience.

There is a much smaller set of concepts, however, that come up repeatedly in day-to-day decision making, problem solving, and truth seeking. As Munger says, “80 or 90 important models will carry about 90% of the freight in making you a worldly‑wise person.”

This post is my attempt to enumerate the mental models that are repeatedly useful to me. This set is clearly biased from my own experience and surely incomplete. I hope to continue to revise it as I remember and learn more.

How-to Use This List

I find mental models are useful to try to make sense of things and to help generate ideas. To actually be useful, however, you have to apply them in the right context at the right time. And for that to happen naturally, you have to know them well and practice using them.

Therefore, here are two suggestions for using this list:

1. For mental models you don’t know or don’t know well, you can use this list as a jumping off point to study them. I’ve provided links (mainly to Wikipedia) to start that process.
2. When you have a particular problem in front of you, you can go down the relevant sections of the list, and see if any of the models could possibly apply.

Notes

• The numbers next to each mental model reflect the frequency with which they come up:
  (1) — Frequently (61 models)
  (2) — Occasionally (41 models)
  (3) — Rarely, though still repeatedly (84 models)
• If studying new models, I’d start with the lower numbers first.
• I am not endorsing any of these concepts as normatively good; I’m just saying they have repeatedly helped me explain and navigate the world.
• I wish I had learned many of these years earlier.