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Learnings Mental Models

Unleashing the Power of Sensitivity Analysis: A Key to Informed Decision-Making

Introduction Sensitivity Analysis, a powerful mental model, plays a crucial role in decision-making processes. It involves examining how changes in variables or factors impact outcomes and decisions. Anchored in human psychology, this model helps us understand the potential impact of uncertainties and variations, enabling more informed and robust decision-making. In our day-to-day lives, sensitivity analysis […]

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Learnings Mental Models

Understanding the Central Limit Theorem: Navigating Decision-Making with Statistical Power

Introduction The Central Limit Theorem (CLT) is a fundamental concept in statistics that holds great relevance in decision-making processes. It states that when independent random variables are added, their sum tends to follow a normal distribution, regardless of the shape of the original variables’ distribution. This mental model is anchored in human psychology as we […]