Learnings Mental Models

The 3-6-3 Rule: Unraveling the Illusion of Simplicity in Decision-Making


In the realm of decision-making, the 3-6-3 Rule stands as a mental model that can significantly impact our choices. This rule refers to a simplified approach often used in banking and financial institutions, where depositors are promised a 3% interest rate, loans are provided at 6%, and bankers hit the golf course at 3 PM. While initially appearing straightforward and appealing, this mental model is rooted in human psychology and can lead individuals and organizations astray. Understanding the 3-6-3 Rule and its implications is crucial for making informed decisions and avoiding potential pitfalls.

Defining the 3-6-3 Rule and Its Relevance

The 3-6-3 Rule represents a simplified decision-making framework prevalent in banking, specifically focusing on attracting deposits at a low-interest rate, offering loans at a higher interest rate, and maintaining a work culture that facilitates early departures. This rule demonstrates the relevance of simplicity, efficiency, and profitability in decision-making processes. However, it is essential to recognize the potential drawbacks of oversimplification and the blind adherence to this rule.

Anchoring in Human Psychology and Prevalence in Daily Life

The 3-6-3 Rule finds its roots in human psychology and the desire for simplicity and convenience. Our cognitive biases, such as heuristics and mental shortcuts, lead us to gravitate towards straightforward and easy-to-understand models. This mental model’s prevalence extends beyond the banking sector, influencing choices in personal life, business scenarios, and even public policy-making. The allure of simplicity often blinds individuals and groups to potential complexities and risks, leading to irrational decisions contrary to their best interests.

Examples of the 3-6-3 Rule in Different Contexts

  1. Personal Life: Imagine an individual seeking to invest their savings. They come across an investment opportunity promising a fixed 3% return. Seduced by the simplicity and familiarity of the 3-6-3 Rule, they invest without conducting thorough research or considering other potentially more lucrative options. By falling prey to this fallacy, they may miss out on better investment opportunities and fail to maximize their returns.
  2. Business Scenarios: In the business world, the 3-6-3 Rule can manifest in various ways. For example, a company may adopt a rigid pricing strategy, consistently charging customers 3 times the production cost. While this approach appears straightforward and profitable, it overlooks market dynamics, customer preferences, and the potential for more nuanced pricing strategies. By blindly adhering to the 3-6-3 Rule, businesses risk losing competitive advantages and failing to meet evolving customer demands.
  3. Public Policy-making: The allure of simplicity can also impact public policy decisions. Policymakers may be tempted to adopt one-size-fits-all solutions without considering the complexities and unique circumstances of different communities. By following the 3-6-3 Rule, policymakers may overlook the diversity of needs, resulting in ineffective or inefficient policies that fail to address specific societal challenges adequately.

Mental Biases and Psychological Underpinnings of the 3-6-3 Rule

Several cognitive biases contribute to the prevalence of the 3-6-3 Rule and its potential drawbacks:

  1. Cognitive Ease: The cognitive ease bias suggests that our minds prefer information that is easy to process and understand. The simplicity and familiarity of the 3-6-3 Rule make it mentally comfortable, leading individuals to accept it without critical evaluation.
  2. Anchoring Bias: The anchoring bias leads individuals to rely heavily on the initial information presented when making subsequent judgments. In the case of the 3-6-3 Rule, the initial numbers (3% interest, 6% loan rate, 3 PM departure) serve as an anchor that influences decision-making, even if it may not be the most optimal choice.
  3. Confirmation Bias: Confirmation bias drives individuals to seek information that confirms their existing beliefs or assumptions. Once someone adopts the 3-6-3 Rule, they may actively search for evidence that supports its effectiveness while ignoring information that challenges its validity.

Identifying and Avoiding the 3-6-3 Rule Pitfall

To avoid succumbing to the limitations of the 3-6-3 Rule, individuals can employ the following strategies:

  1. Embrace Complexity: Acknowledge that real-world decision-making often involves complexities and nuances. Embrace the idea that oversimplification may lead to missed opportunities and suboptimal outcomes. Seek out diverse perspectives, conduct thorough research, and challenge assumptions to gain a more comprehensive understanding.
  2. Analyze Trade-offs: Instead of blindly accepting the 3-6-3 Rule, evaluate the trade-offs involved in each decision. Consider the potential risks, rewards, and long-term implications. Engage in a deeper analysis of the situation to make well-informed choices that align with your specific goals and circumstances.
  3. Incorporate Flexibility: Recognize that rigid adherence to a simplistic rule may not always yield the best results. Embrace flexibility and adaptability in decision-making, allowing room for innovation, experimentation, and continuous learning. Remain open to alternative approaches that may better suit the evolving context.


The 3-6-3 Rule highlights the allure of simplicity and efficiency in decision-making processes. However, it is essential to understand the psychological underpinnings, biases, and potential drawbacks associated with this mental model. By embracing complexity, analyzing trade-offs, and incorporating flexibility, individuals can avoid the pitfalls of the 3-6-3 Rule and make more objective and informed decisions. Awareness and active avoidance of this mental trap empower individuals to navigate the complexities of decision-making, ultimately leading to better outcomes and long-term success.

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