Introduction In the complex landscape of decision-making, our reputations often play a pivotal role. Our reputation, the way others perceive us, influences how we are treated, opportunities that come our way, and the trust people place in us. However, there is a psychological phenomenon called “Reputation Fragility” that can cloud our judgment and lead us […]
Introduction In the realm of decision-making, it is crucial to consider the limitations of our models and assumptions. The Lucas Critique, named after economist Robert E. Lucas Jr., emphasizes the need to account for how individuals and organizations respond to changes in policy or external factors. This mental model challenges the effectiveness of static models […]
Introduction In the realm of decision-making, understanding the complexities of human behavior is crucial. One mental model that sheds light on these complexities is the Exit Voice and Loyalty Model. Coined by economist Albert O. Hirschman in 1970, this model explores how individuals and groups respond to unsatisfactory situations by either exiting the situation altogether, […]
Introduction In the realm of decision-making, our thought processes are influenced by various mental models that shape our perception of reality. One such mental model that frequently leads to irrational decision-making is the Parity Condition. Rooted in human psychology, the Parity Condition is a cognitive bias where individuals or groups base their judgments on superficial […]
Introduction In the realm of decision-making, it’s all too easy to fall into the trap of bottlenecks. The bottlenecks mental model refers to the cognitive bias where individuals or groups disproportionately focus on specific factors, leading to irrational decision-making. This blog post aims to shed light on the concept of bottlenecks, its relevance in decision-making […]
Introduction In the realm of decision-making, the human mind is prone to biases and fallacies that can lead us astray. One such mental model that profoundly impacts our choices is the concept of Moral Hazard. Coined in the field of economics, Moral Hazard refers to the phenomenon where individuals or groups, protected from the negative […]