Introduction Black Swan events, a captivating mental model, refer to rare, unpredictable, and high-impact events that have significant consequences. This concept is crucial in decision-making processes as it challenges our ability to anticipate and plan for extreme and unexpected occurrences. Anchored in human psychology, the prevalence of Black Swan events in our day-to-day lives necessitates […]
Introduction In the realm of decision-making, understanding the mental models that shape our choices is invaluable. One such powerful model is the Kelly Criterion. This concept provides a systematic approach to managing risk and maximizing long-term growth. Anchored in human psychology, the Kelly Criterion influences our day-to-day lives, from personal decisions to business strategies and […]
Introduction In the realm of decision-making, the mental model of Redundancy plays a critical role in mitigating risks and improving outcomes. Redundancy refers to the intentional inclusion of backups or duplicates in a system or decision-making process. It is rooted in human psychology and prevalent in our daily lives. This blog post aims to explore […]
Introduction In the realm of decision-making, human minds are often swayed by cognitive biases that can lead to irrational judgments. One such bias, known as the Law of Large Numbers mental model, plays a significant role in shaping our decision-making processes. Anchored in human psychology, this model relates to the belief that outcomes will align […]
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 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 […]