Introduction In the realm of decision-making, the Heuristic for Availability is a mental model that influences our judgments and choices. Anchored in human psychology, this heuristic suggests that the ease with which examples or information come to mind shapes our perception of their likelihood or importance. Understanding the relevance of the Heuristic for Availability is […]
Introduction In the realm of decision-making, the concept of First-Movers and Last-Movers Advantage plays a significant role in shaping our choices. This mental model revolves around the idea that being the first to enter a market or adopting a particular strategy can provide a competitive advantage. Conversely, there are situations where being a late entrant […]
Introduction 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 […]
Introduction In the realm of decision-making, mental models play a crucial role in shaping our perceptions and guiding our choices. One such influential mental model is the Phillips Curve. Coined by economist A.W. Phillips in the 1950s, the Phillips Curve suggests an inverse relationship between unemployment and inflation rates. Understanding this mental model is essential, […]
Introduction In the realm of decision-making, various mental models aid our understanding of complex situations and guide us towards making informed choices. One such influential mental model is the Porter Five Forces framework, developed by renowned economist Michael Porter. This comprehensive model provides a structured analysis of the competitive dynamics in an industry, offering valuable […]
Introduction Within the intricate realm of decision-making, the Arbitrage mental model stands as a captivating concept that explores the pursuit of risk-free gains through exploiting price discrepancies. Anchored in human psychology, this model reveals our innate desire for profit and the tendency to make irrational decisions when faced with opportunities that seem too good to […]