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 vast landscape of human decision-making, our minds are subject to various biases and cognitive traps that can lead us astray from rational thinking. One such mental model is the Ratchet Effect, a phenomenon rooted in human psychology that affects our day-to-day lives, personal decisions, business strategies, and even public policy-making. Understanding the […]
Introduction In the realm of decision-making, a phenomenon known as Founder’s Syndrome holds significant influence. Founder’s Syndrome refers to the psychological and behavioral patterns that can arise when the founder or key individuals in an organization, relationship, or even personal life become entrenched in their ideas and resist change or differing perspectives. This mental model, […]
Introduction: In the vast landscape of human decision-making, various mental models shape our thoughts and actions. One particularly intriguing model is the Bribery mental model, which elucidates the powerful influence of incentives on our choices. Rooted in human psychology, this model explores how we are susceptible to irrational decision-making when enticed by rewards or inducements. […]
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, […]
Introduction In the realm of decision-making, the Nash Equilibrium mental model plays a significant role. Coined after the brilliant mathematician John Nash, this concept seeks to explain a common phenomenon: individuals or groups, driven by self-interest, often make choices that are contrary to what may seem rational at first glance. Nash Equilibrium is not only […]