Introduction In the complex landscape of decision-making, we often find ourselves facing a psychological phenomenon known as the Winner’s Curse. This mental model refers to a situation in which the winner of an auction or competitive bidding process tends to overpay or overvalue the object of desire. Whether it’s a personal life decision, a business […]
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, humans often find themselves swayed by a range of cognitive biases that lead to irrational choices. One such mental model, the Fisher Effect, holds significant relevance in understanding the intricacies of decision-making processes. The Fisher Effect refers to the tendency of individuals to mistakenly believe that real returns on […]
Introduction In the realm of decision-making, our minds are often subject to cognitive biases and heuristics that can lead us astray. One such powerful mental model is known as “Mr. Market.” Coined by Benjamin Graham, an influential investor and economist, the concept of Mr. Market revolves around the idea that individuals and groups often make […]
Introduction In the realm of decision-making, our minds are constantly influenced by various mental models that shape our perceptions and judgments. One such powerful mental model is “scarcity,” which refers to the fundamental condition of limited resources. Understanding and recognizing the scarcity mental model is crucial as it plays a significant role in shaping our […]
Introduction In our daily lives, we constantly make decisions based on the perceived availability and desirability of goods, services, and resources. The mental model of Demand and Supply plays a crucial role in shaping these decisions. Originating from the field of economics, Demand and Supply is a fundamental concept that explains the relationship between the […]