Decision Making
Mental Models
A mental model is an explanation of how something works. The phrase “mental model” is an overarching term for any sort of concept, framework, or worldview that you carry around in your mind. Mental models define what people will pay attention to and how they approach and solve problems. Mental models are tools for the mind. While thinking about a problem, mental models provide you a map with which you can quickly course correct your line of inquiry.
Mental Model | Description |
Circle of Competence | Either through experience or study, all of us have built up useful knowledge on certain areas of the world. Some areas are common knowledge and are understood by most of us, while some areas require a lot more work to understand. These areas are your circle of competence. If you want to improve your odds of success, define your circle of competence and operate inside. |
Gambler’s Fallacy | The Gambler’s Fallacy is the mistaken belief that, if something happens more frequently than normal during some period, it will happen less frequently in the future, or that, if something happens less frequently than normal during some period, it will happen more frequently in the future (presumably as a means of balancing nature). It is called Gambler’s Fallacy because it rampant among gamblers and speculators. |
Occam’s Razor | Occam’s Razor (also known as the “law of parsimony”) is a very useful principle for solving problems more quickly and efficiently. It states that among competing hypotheses, the hypothesis with the fewest assumptions should be selected. Other, more complicated solutions may ultimately prove to provide better predictions, but—in the absence of differences in predictive ability—the fewer assumptions that are made, the better. |
Confirmation Bias | Confirmation bias is our tendency to cherry-pick information that confirms our existing beliefs or ideas. We are prone to remain consistent with our earlier decisions or commitments, so we selectively seek information which is consistent with our beliefs and discard any disconfirming evidence. |
Do Something Bias | In an attempt to be efficient and productive we force ourselves to always stay busy with some task or other. Not being occupied gives the impression that we are incompetent and wasteful. But sometimes, quite often actually, too much activity becomes counterproductive. This is known as Do Something Bias (DSB). |
Pavlovian Conditioning | Pavlovian Conditioning or classical conditioning is a behavioural trait which works to trigger positive or negative emotions depending on the stimulus that is paired in the experiment. For example, If for example rats consistently receive mild electrical shock after hearing a tone, the rats learn to develop a fear of the tone alone. |
Kantian Fairness Tendency | The human psyche is so obsessed with the idea of fairness. The tendency to seek fairness in all transactions is not an invention of modern man, but the behaviour has been tattooed at a much deeper level by evolutionary process. The basic idea of fairness is that we have devised certain rules that, when followed by everyone, result in a pretty smooth life for all involved. The key is that everyone needs to follow along. |
Mean Reversion | Mean reversion is a mental model from the field of statistics. It says that an event that is not average will be followed by an event that is closer to the average. I was suffering from the tendency to attribute meaning to a phenomenon governed only by chance. |
Reciprocity Bias | Reciprocity Bias is an unsaid rule which says that we should try to repay, in kind, what another person has provided us. We are obligated (not by some external force but an internal urge) to the future repayment of favors, gifts, invitations, and the like. This rule is deeply implanted in us by the process of socialization that homo sapiens has undergone over thousands of years. |
Inversion | The principle of inversion is a common trick used by mathematicians but rarely practiced outside the discipline of mathematics. Reversing how you look at a situation can open up new possibilities and dislodge assumptions. |
Logical Fallacies
Fallacies are common flaws in reasoning that will undermine the logic of your argument. Fallacies can be either illegitimate arguments or irrelevant points, and are often identified because they lack evidence that supports their claim. Logical fallacies are like tricks or illusions of thought, and they’re often very sneakily used by politicians and the media to fool people.
Logical Fallacy | Description |
Ad Hominem | Ad hominem, short for argumentum ad hominem, is Latin for “to the man” or “to the person”. This fallacy is committed when the focus of the argument is diverted to the motives or character of the person creating the argument and not on the argument itself. |
Appeal to Authority | Using the opinion of an authority figure or someone in a position of authority in place of a real argument. |
Appeal to Emotion | The “appeal to emotion” fallacy manipulates an emotional response in place of a logical argument. |
Appeal to Nature | Making the argument that because something is “natural” or appears to be similar to nature that it must be good or logical. |
Bandwagon | The bandwagon fallacy assumes that something is true simply because a number of other people support it to be true. |
Begging the Question | Also known as a circular argument, the argument has the conclusion included in the supporting premise. |
Burden of Proof | When someone makes a claim and puts it on someone else to prove their claim false. |
Confirmation Bias | The tendency for people to find information that supports their beliefs and refuse to look for further information when their belief has already been supported. |
“Fallacy” Fallacy | So, the idea here is that when someone points out a fallacy in an argument, the argument must be wrong… right? Wrong. Just because a fallacy has been committed in an argument, does not necessarily mean it is inherently false. It simply means that more work needs to be done to it. |
False Cause | The false cause fallacy assumes that when two events happen in immediate succession, the former event caused the latter. |
False Dichotomy | The premise states two options that may be true when in reality there are other options that could occur. |
Hasty Generalization | Hasty generalization is just bad statistics. You take a few specific observations about a group of people and then apply it to the whole. |
Middle Ground | This fallacy occurs when someone states that the middle point or compromise between two extremes must be the truth. |
Red Herring | The red herring fallacy distracts the person from the original argument with an irrelevant topic. |
Slippery Slope | The slippery slope fallacy assumes that if an event occurs, a series of following events will occur in succession that will lead to an extreme outcome. |
Strawman | The strawman fallacy creates a weaker version of an argument and then attacks it rather than attacking the argument itself. |
Tu Quoque | Pronounced too-kwo-kwee, it literally translates as “you too”. Instead of formulating a rebuttal to an argument, you respond with criticism or imply hypocrisy. |
Thought Experiments
A thought experiment considers a hypothesis, theory, or principle for the purpose of thinking through its consequences. The common goal of a thought experiment is to explore the potential consequences of the principle in question.
Thought Experiment | Description |
The Euthyphro Problem | Socrates and Euthyphro are engaged in a discussion on morality. Socrates asks Euthyphro a pressing question: Does God command it because it is the right thing to do? OR Is it the right thing to do because God commands it? |
Pascal’s Wager | A philosopher by the name of Blaise Pascal came up with a thought experiment that attempts to show that you are better off believing in God than you are no believing. |
The Gettier Problem | What is knowledge? Or what does it mean to truly “know” something to be true? According to Plato, knowledge can be defined as a justified true belief. But Edmund Gettier came up with examples where someone meets all the criteria, however, the person still seems to fall short of knowledge. In these cases the protagonist believes something to be true, it is true, but the justification does not directly prove that it is true. |
The Problem Of Induction | Whenever we observe something in the world, we are likely to categorize it and organize it in such a way that we can understand what it is. After we have observed a cause and effect relationship or a repeated occurrence, we are likely to create a rule to say that the same causal relationship or event will happen in the future. Induction works not because it is necessarily the “truth” but because it works for our purpose of moving forward in search of the truth. When we observe things in science they may always be subject to change in some shape or form. |
The Problem Of Moral Luck | When a man robs the pharmacy for drugs we are likely to say he is acting morally impermissible. However, if the same man robbed the pharmacy in order to save his dying 8-year-old daughter because his family is too poor to afford the medicine, we may grant him a sort of pardon that allows for his actions to be a bit more permissible. Since the immoral behavior wasn’t entirely of his own being and instead was due to circumstance, we call this circumstantial moral luck. |
Can Artificial Intelligence Be Conscious? | There is no way to prove whether someone else possesses consciousness or if they are merely a collection of reactions… stimulus and response. So what does it mean to be human? And is it possible for a machine to be sentient? |
The Problem of Evil | If God exists… Why does so much evil exist in the world? Sometimes it can be baffling to see a human being treat another with such cruelty. And let’s not forget natural disasters, famine, disease… the list goes on. |
Plato’s Allegory of The Cave | The idea here is that once someone has been philosophically enlightened, they will both know the truth of the world while also remaining an outcast to society. As we question and learn the deeper meanings of the world… the truth and all that is good… we free people from their pseudo-realities and help them reach a deeper and satisfactory understanding of the world. |
The Trolley Problem | A train is coming on the tracks, and it’s moving in fast! It just so happens that 5 people are not paying attention and it’s about to hit them and kill them all. However, there is a solution! You are standing next to a lever that will divert the train onto another track. Great! Here’s the catch: By moving the lever you will cause the train to discourse and inadvertently kill one other innocent person on the other set of tracks. Do you pull the lever to save the 5 while also being responsible for killing the 1 person on the other set of tracks? |
How should we determine what is moral? | Some actions may seem universally moral or immoral. Most of us would agree it is immoral to kill someone without a reason… And many of us will agree that we should treat others with kindness. So what are we to do with all of the cluster and disagreements in between? |
Ship of Theseus | Imagine this…The ship that the hero, Theseus, sailed has been recovered and placed in a museum. Over time, the museum restores the ship, replacing the rotten wooden parts with new ones. Eventually, the ship has been completely replaced by new parts. Is it the same ship? |
Do We Have Free Will? | What made you get up this morning? Was it that you chose to do so or was it a combination of your biological makeup and upbringing that made you systematically get out of bed? It seems problematic whether or not we have free will. We may never be able to prove if the “soul” really exists and can make decisions on a metaphysical level. |
The Prisoner’s Dilemma | Two troublemakers stole electronics from a retail store and are making a run for it! Unfortunately for them, the police end up arresting them and later bring them in for questioning. The police have been tipped that the robbers are in connection to a larger crime. Although there is only evidence for the current robbery at hand, the prisoner’s dilemma will cause the duo to turn each other in for the larger crime. |
The Baby Problem | The most wanted gang in all of the land has come to raid your village. Your only hope of survival is for you and all of the townspeople to duck into a secret hideout and wait until the gang has left. You sit there silently, quietly, with anxious anticipation while the gang stomps on the floors above you. All the while you are holding your baby boy. You know the baby will cough soon and give away everyone’s location. You have two choices: 1) Smother your baby (thus killing it) in order to keep the bandits from finding your location and killing both you and everyone in the village, or, 2) Let the baby live and get you, your baby, and the village killed by the bandits. |
The Cap | A sixteen year old prisoner was raped by a guard in a Nazi concentration camp. The guard then stole the prisoner’s cap, knowing that any prisoner that appeared without a cap in the morning would be immediately shot. If the prisoner was killed, nobody would be able to find out about the rape. In order to stay alive, the prisoner decided to steal a cap from another inmate. The next morning the other prisoner was shot and killed. Should one prisoner be valued over the other? Was the prisoner wrong for stealing the other’s cap in order to save his own life? |
The Overcrowded Lifeboat | In 1842, a ship struck an iceberg and more than 30 survivors were crowded into a lifeboat intended to hold 7. As a storm threatened, it became obvious that the lifeboat would have to be lightened if anyone were to survive. The captain reasoned that the right thing to do in this situation was to force some individuals to go over the side and drown. Such an action, he reasoned, was not unjust to those thrown overboard, for they would have drowned anyway. If he did nothing, however, he would be responsible for the deaths of those whom he could have saved. Since the only possibility for rescue required great efforts of rowing, the captain decided that the weakest would have to be sacrificed. As it turned out, after days of hard rowing, the survivors were rescued and the captain was tried for his action. If you had been on the jury, how would you have decided? |
A Father’s Agonizing Choice | You are an inmate in a concentration camp. A sadistic guard is about to hang your son who tried to escape and wants you to pull the chair from underneath him. He says that if you don’t he will not only kill your son but some other innocent inmate as well. You don’t have any doubt that he means what he says. What should you do? |
Sophie’s Choice | In the novel Sophie’s Choice, a Polish woman, Sophie Zawistowska, is arrested by the Nazis and sent to the Auschwitz death camp. On arrival, she is “honored” for not being a Jew by being allowed a choice: One of her children will be spared the gas chamber if she chooses which one. In an agony of indecision, as both children are being taken away, she suddenly does choose. Did she do the right thing? |
Paradoxes
A paradox is a statement or problem that either appears to produce two entirely contradictory (yet possible) outcomes, or provides proof for something that goes against what we intuitively expect. A lot of important truths in life are contradictory. And we get used to these contradictions as we experience them in our lives. The truth is, life is often illogical, paradoxical, and just blatantly strange.
Paradox | Description |
The Liar Paradox | Suppose someone tells you “I am lying.” If what she tells you is true, then she is lying, in which case what she tells you is false. On the other hand, if what she tells you is false, then she is not lying, in which case what she tells you is true. In short: if “I am lying” is true then it is false, and if it is false then it is true. |
The Card Paradox | Imagine you’re holding a postcard in your hand, on one side of which is written, “The statement on the other side of this card is true.” We’ll call that Statement A. Turn the card over, and the opposite side reads, “The statement on the other side of this card is false” (Statement B). Invented by the British logician Philip Jourdain in the early 1900s, the Card Paradox is a simple variation of the Liar Paradox, in which assigning truth values to statements that purport to be either true or false produces a contradiction. |
The Paradox of the Court | The Paradox of the Court, also known as Protagoras’ paradox, is a paradox originating in ancient Greece. It is said that the famous lawyer and scholar Protagoras took on a pupil, Euathlus, for not paying his fees. The understanding was that the student Euathlus would pay fees to Protagoras for his instruction, after Euathlus wins his first court case. Protagoras was much in demand as a law teacher. After instruction, Euathlus decided to not enter the profession of law, and Protagoras decided to sue Euathlus for the amount owed. |
The Crocodile Paradox | A crocodile snatches a young boy from a riverbank. His mother pleads with the crocodile to return him, to which the crocodile replies that he will only return the boy safely if the mother can guess correctly whether or not he will indeed return the boy. The Crocodile Paradox is such an ancient and enduring logic problem that in the Middle Ages the word “crocodilite” came to be used to refer to any similarly brain-twisting dilemma where you admit something that is later used against you, while “crocodility” is an equally ancient word for captious or fallacious reasoning. |
Achilles and the Tortoise | It begins with the great hero Achilles challenging a tortoise to a footrace. To keep things fair, he agrees to give the tortoise a head start of, say, 500m. When the race begins, Achilles unsurprisingly starts running at a speed much faster than the tortoise, so that by the time he has reached the 500m mark, the tortoise has only walked 50m further than him. But by the time Achilles has reached the 550m mark, the tortoise has walked another 5m. And by the time he has reached the 555m mark, the tortoise has walked another 0.5m, then 0.25m, then 0.125m, and so on. This process continues again and again over an infinite series of smaller and smaller distances, with the tortoise always moving forwards while Achilles always plays catch up. |
The Dichotomy Paradox | Imagine that you’re about to set off walking down a street. To reach the other end, you’d first have to walk half way there. And to walk half way there, you’d first have to walk a quarter of the way there. And to walk a quarter of the way there, you’d first have to walk an eighth of the way there. And before that a sixteenth of the way there, and then a thirty-second of the way there, a sixty-fourth of the way there, and so on. To go anywhere, you must go halfway first, and then you must go half of the remaining distance, and half of the remaining distance, and so forth to infinity: Thus, motion is impossible. |
The Arrow Paradox | In any instant, a moving object is indistinguishable from a nonmoving object: Thus motion is impossible. This is called the arrow paradox (fletcher’s paradox), and it’s another of Zeno’s arguments against motion. |
The Unexpected Hanging | A judge tells a condemned prisoner that he will be hanged at noon on one weekday in the following week but that the execution will be a surprise to the prisoner. He will not know the day of the hanging until the executioner knocks on his cell door at noon that day. The unexpected hanging paradox or surprise test paradox is a paradox about a person’s expectations about the timing of a future event which they are told will occur at an unexpected time. The paradox is variously applied to a prisoner’s hanging or a surprise school test. |
The Lottery | You buy a lottery ticket, for no good reason. Indeed, you know that the chance that your ticket will win is at least 10 million to one, since at least 10 million tickets have been sold. So you are rationally justified in believing that your ticket will lose. Likewise, you are justified in believing that your friend Jane’s ticket will lose, that your uncle Harvey’s ticket will lose, that your dog Ralph’s ticket will lose, and so on for each ticket bought by anyone you know or don’t know. In general, for each ticket sold in the lottery, you are justified in believing: “That ticket will lose.” It follows that you are justified in believing that all tickets will lose, or (equivalently) that no ticket will win. But, of course, you know that one ticket will win. So you’re justified in believing what you know to be false (that no ticket will win). How can that be? |
The Boy or Girl Paradox | Imagine that a family has two children, one of whom we know to be a boy. What then is the probability that the other child is a boy? |
Meno’s Problem | Socrates and Meno are engaged in a conversation about the nature of virtue. Meno offers a series of suggestions, each of which Socrates shows to be inadequate. Socrates himself professes not to know what virtue is. How then, asks Meno, would you recognize it, if you ever encounter it? How would you see that a certain answer to the question “What is virtue?” is correct, unless you already knew the correct answer? It seems to follow that no one ever learns anything by asking questions, which is implausible, if not absurd. |
Moore’s Puzzle | Suppose you are sitting in a windowless room. It begins to rain outside. You have not heard a weather report, so you don’t know that it’s raining. So you don’t believe that it’s raining. Thus, your friend McGillicuddy, who knows your situation, can say truly of you, “It’s raining, but MacIntosh doesn’t believe it is.” But if you, MacIntosh, were to say exactly the same thing to McGillicuddy—“It’s raining, but I don’t believe it is”—your friend would rightly think you’d lost your mind. Why, then, is the second sentence absurd? As G.E. Moore put it, “Why is it absurd for me to say something true about myself?” |
The Potato Paradox | Imagine that a farmer has a sack containing 100 lbs of potatoes. The potatoes, he discovers, are comprised of 99% water and 1% solids, so he leaves them in the heat of the sun for a day to let the amount of water in them reduce to 98%. But when he returns to them the day after, he finds his 100 lb sack now weighs just 50 lbs. How can this be true? |
The Bootstrap Paradox | Imagine that a time traveller buys a copy of Hamlet from a bookstore, travels back in time to Elizabethan London, and hands the book to Shakespeare, who then copies it out and claims it as his own work. Over the centuries that follow, Hamlet is reprinted and reproduced countless times until finally a copy of it ends up back in the same original bookstore, where the time traveller finds it, buys it, and takes it back to Shakespeare. Who, then, wrote Hamlet? |
The Grandfather Paradox | Let’s suppose you have a time machine that allows you to travel back into the past. While you’re there, you accidentally kill one of your grandparents before they have any offspring. This would lead to a situation where your parent (grandfather’s child) would not be born at all. As a result, you also wouldn’t be born at all. But if you weren’t born in the future, then you couldn’t kill your grandfather in the past. So, who killed the grandfather in the first place? |
Buridan’s Ass | Buridan’s ass is an illustration of a paradox in philosophy in the conception of free will. It refers to a hypothetical situation wherein an ass (donkey) that is equally hungry and thirsty is placed precisely midway between a stack of hay and a pail of water. Assume that the surrounding environments on both sides are also identical. Since the paradox assumes the donkey will always go to whichever is closer, it dies of both hunger and thirst since it cannot make any rational decision between the hay and water. |
Mindset
Book Notes
Book | Author |
Pensées | Blaise Pascal |
Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger | Charles T. Munger |
A Master’s Secret Whispers | Kapil Gupta |
Atmamun | Kapil Gupta |
Direct Truth | Kapil Gupta |
Outliers: The Story of Success | Malcolm Gladwell |
The Essays: A Selection | Michel Montaigne |
Think and Grow Rich | Napoleon Hill |
Antifragile | Nassim Nicholas Taleb |
Skin in the Game | Nassim Nicholas Taleb |
The Black Swan | Nassim Nicholas Taleb |
Mastery | Robert Greene |
The 48 Laws of Power | Robert Greene |
The 7 Habits of Highly Effective People | Stephen Covey |
The War of Art | Steven Pressfield |
Inside Arthur Andersen | Susan Elaine Squires, Cynthia J. Smith, Lorna McDougall, William R. Yeack |
Famous Speeches
Here is this list of some inspiring speeches and insightful talks. This includes some famous speeches that lifted hearts in dark times, gave hope in despair, refined the characters of men, inspired brave feats, gave courage to the weary, honored the dead, and changed the course of history.
Speech | Speaker |
A Lesson on Elementary, Worldly Wisdom | Charlie Munger |
How to Guarantee a Life of Misery | Charlie Munger |
The Psychology of Human Misjudgment | Charlie Munger |
2007 USC Law School Commencement Address | Charlie Munger |
The Third Philippic | Demosthenes |
What Matters More Than Your Talents | Jeff Bezos |
The Multidisciplinary Approach to Thinking | Peter Kaufman |
Seeking New Laws | Richard Feynman |
We Shall Fight on the Beaches | Winston Churchill |
Blood, Sweat, and Tears | Winston Churchill |
Management Lessons
Motivational Stories
Articles Worth Reading
Quotes
10 Relatable Quotes about Life
Powerful Quotes that will Upgrade your Thinking
Witty Quotes from Leo Rosten’s Carnival of Wit
Words of Wisdom: Top Marcus Aurelius Quotes for Reflection and Inspiration