Introduction In the realm of decision-making, individuals often rely on mental shortcuts or heuristics to simplify complex choices. These mental models can influence our judgment and lead us astray, particularly when they are rooted in our psychological predispositions. One such mental model is the “Five Reasons Why You Should Buy a New Car.” This concept […]
Tag: financial decisions
Introduction In the intricate landscape of decision-making, the mental model of mental accounting holds a crucial role. Mental accounting refers to the tendency of individuals to compartmentalize and assign different values to money, resources, and investments based on subjective factors. Anchored in human psychology, this mental model sheds light on how our financial and non-financial […]
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 […]