Hi friends, hope we’re all keeping well.
Let’s talk about some more mental models. For those who didn’t see my last post on some interesting mental models (see here😄) and don’t know what the hell they are, let’s have a quick reminder at what Wikipedia says about them:
“A mental model is an explanation of someone’s thought process about how something works in the real world. It is a representation of the surrounding world, the relationships between its various parts and a person’s intuitive perception about his or her own acts and their consequences.”
Essentially, they are different ways to think about stuff and their relationships with other stuff. By harnessing the power of mental models, we can gain a deeper understanding of the world around us, while also become better equipped at making better and more informed decisions.
“When you don’t use mental models, strategic thinking is like using addition when multiplication is available to you.”-Gabriel Weinberg and/or Lauren McCann.
Some examples of mental models that I covered in my previous post include availability bias, survivorship bias, and Ockham’s Razor.
One final thing before we dive into it, is that I learned all these mental models from the book ‘Super Thinking’, so make sure to check it out if you find any of this stuff interesting.
Alright, let’s jump into 3 more mental models then.
1. 💪Antifragility 💪
So, we know what fragile is, right? It’s used to describe things that break, shatter, or become useless if they’re exposed to enough stress or pressure. The concept of being anti fragile is the complete, polar opposite of this, but more.
To be antifragile does not only mean you are unfazed by external negative forces, like pressure, stress, failure, uncertainty, fear, risk and disorder, but experiencing these things help make you stronger and more resilient to them as well. Well actually, antifragility goes way beyond resilience.
If something is resilient, it will experience the shock and stay the same and remain unchanged.
The antifragile will experience that same shock, but will get better.
Why should you know this?
-We should all adopt and live by the concept of antifragile. Instead of letting external negative factors like worry, pressure and distress wear us down, we should allow them to harden ourselves and become better, stronger, and more powerful than before.
-We should mould our way of thinking to become antifragile. This way, we are continuously learning from our mistakes and failures to improve our mindset and the way we interact with our environment.
2. 🧐Conjunction Fallacy🧐
This is, in my opinion, a really fascinating one that we see virtually everywhere.
If I want to explain this mental model, then the best way would be to first give an example and ask a question.
Let’s say we have a man called Daniel who is eating inside an Italian restaurant. Daniel has looked at the menu and has ordered seafood tagliatelle (which is basically pasta in narrow ribbons).
Now let me ask you this, which is more likely: the probability that Daniel is Italian or the probability that Daniel is Italian AND also likes seafood?
I reckon the majority might say the second option, where Daniel is Italian and likes to eat seafood, since he’s eating in an Italian restaurant and has just ordered a dish that has seafood. Common sense, right?
This, however, is false.
The conjunction fallacy happens when we assume that specific conditions are more likely to be true than more general conditions.
The fact is, the probability of Daniel JUST being Italian, or JUST liking seafood, is much higher than the probability of Daniel being Italian AND liking seafood, because the first cases are more general than the second!
Why should you know this?
-By recognising when you may be entering the trap of the conjunction fallacy, it’s likely you can refine your decision making, critical thinking, and reasoning skills! You can also realise when others make the mistake of entering the conjunction fallacy, and point out how they have reached a false conclusion about something.
3. ⚓️Anchoring ⚓️
Anchoring is essentially a cognitive bias, where people rely too much on a particular point of reference (the anchor), when making decisions or reaching judgements. Once the anchor is set into place, the person may make estimates, arguments, or decisions that would be different, had the anchor not been in place.
This mental model might seem a bit difficult to comprehend at first, but I assure you it’s actually a pretty simple concept that is crucial to be aware of, as it can be both helpful and dangerous depending on the circumstance.
There are many different examples of anchoring in many different situations too. For example, a person is much, much more likely to buy a car, if the only other cars around it are much higher priced than it. This holds true even if the price of the car itself is still higher than the average market price of that type of car!
In this particular case, the anchor(s) is the price of the other, more expensive cars. Do you see how the price of the other cars have gave you a bad reference, and made you think that the car you were looking at is good value, even though it’s still a rip off from the average market price of cars?
Another example of anchoring can be found in the courtroom. Let’s say we have someone who may have committed a small offence, which realistically gets only 1 month of jail time. This is a fair sentence that any reasonable judge should give without bias for this small offence.
If someone was to suggest to the judge to give the person 6 months of jail time, the judge will most likely see that as unfair, but then use that suggestion as an anchor, and give the person a sentence that’s shorter than the anchor, like 2 or 3 months, but is still much much than the original ‘fair’ value for the sentence (1 month) !
Why should you know this?
-It’s so, so important to be aware of this bias. As we just saw in 2 examples above, falling trap to anchoring bias can lead to people spending more money than they should, and people recieving harsher prison sentences than they should. The anchoring effect can be used as a powerful marketing and sales tool as well, so it helps to be aware of it in that setting.
-The only really good way of combatting the anchor effect is to first recognise when an anchor is being introduced to you (e.g. the price of something), stop, and think of reasons why that anchor is inaccurate, unfair, or unreasonable! Essentially, argue against the anchor and consider alternative options. Going back to the example with our overpriced car, the best way forward would be to visit other car shops and see the prices of similar cars there, THEN judge whether or not you have a fair price.
Cool, that’ll probably wrap up this week’s post on mental models then. I must say, I really do thoroughly enjoy talking about this kind of stuff. Like, psychological effects and biases that can affect our thinking and decision-making. I really do think you can gain advantages over others just by knowing and being aware of them! It’s also really refreshing to be going back over stuff I learnt, as well as trying to strengthen my understanding of it.
Alright nice, stay safe and I’ll hopefully see you in another post!