Introduction In the intricate realm of decision-making, the Bullwhip effect stands as a compelling mental model that sheds light on our tendency to make irrational choices, often contrary to our best interests. Stemming from a phenomenon observed in supply chain management, the Bullwhip effect describes how small fluctuations in consumer demand can amplify as they […]
Introduction: In the realm of decision-making, the human mind is susceptible to various biases and fallacies that can lead to irrational choices. One such influential mental model is the Pari-Mutuel Systems, which has a profound impact on our day-to-day lives. Derived from the French term meaning “mutual betting,” this model originally emerged in the context […]
Introduction In the realm of decision-making, the mental model of diversification plays a significant role. Diversification refers to the practice of spreading one’s resources, efforts, or investments across a range of options or areas. It is a strategy employed to reduce risk, increase opportunities, and achieve a sense of security. Anchored in human psychology, this […]
Introduction In the realm of decision-making, there are various mental models that influence how we perceive and evaluate choices. One such model, known as “Deadweight Loss,” reveals the hidden costs and irrationality that can arise from our decision-making processes. This blog post aims to provide a comprehensive understanding of Deadweight Loss, its relevance in decision-making, […]