The Ultimate Decision Models for the Modern World

Mental models can help us think and understand the world better. Here are some of the best mental models for decision making and innovation.

To improve buildings, sometimes we need scaffolding. To improve decisions, sometimes we need mental scaffolding.

After all, if we cannot safely scale the house to survey the problem from different angles, we risk a problem worse than we started with. We can damage brickwork, fix things only temporarily, or get seriously hurt.

Decisions aren’t dissimilar. If we don’t have the mental scaffolding to survey our choices, to generate and test hypotheses, we risk screwing up big choices.

In short, scaffolding provides a platform for our best work. It provides a safe footing to confidently confront decisions and generate new ideas. And in the world of thinking, this is no better encapsulated than by the idea of mental models.

What Is a Mental Model?

“You can’t really know anything if you just remember isolated facts. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have mental models in your head. And you’ve got to array your experience, both vicarious and direct, on this latticework of models.”

Charlie Munger

Put simply, a mental model is a framework we carry around in our heads to help us make sense of the world around us. We all use mental models, whether we know it or not. They help us connect the dots, take decisions, and form opinions.

These models matter because they form the very foundation by which we live our lives. Expanding and diversifying the mental models at our disposal not only helps us think and understand the world better but can transform our experience of life.

The Great Decision Models

In the arena of psychology, we can enrich our decision making and creativity by learning about some specific mental models. These models – which I call decision models – can help counter innate cognitive biases in our thinking and encourage innovation. They offer up the mental scaffolding upon which we can scale, rationalise, and solve the biggest problems and decisions we face.

Razors: Mental Models to Cut Through Chaos

Let’s start with razors. Philosophical razors are principles by which we can narrow down our options. They are rules of thumb that help us shave away unlikely explanations and leave behind the more robust. In an age in which opinions are instantly accessible and contradictions abound, razors are our starting point in refining and making sense of our choices.

Occam’s Razor: “Choose the simple explanation before the complicated one.” Occam’s razor is a rule of thumb that suggests that when confronted with two competing explanations, the simpler one is more likely to be correct. This razor encourages us to avoid unnecessary or improbable assumptions, recognising that as we add layers of assumptions, explanations become less probable.

Hanlon’s Razor: “Never attribute to malice that which is adequately explained by stupidity.” The idea of Hanlon’s razor is that we address a common attribution bias – our tendency to assume sinister motive – by attributing behaviour to the more likely explanation of negligence or incompetence. As we encounter events and choices in everyday life, referring to this principle can counterbalance our tendency to assume people are out to get us.

Hitchens’s Razor: “What can be asserted without evidence can be dismissed without evidence.” In other words, the burden of proof lies with the person making a claim. If they can’t back it up with evidence, we needn’t argue the matter further. This isn’t a hard-and-fast rule to stifle debate – there are some obvious exceptions where this principle might not be so helpful – but it is a useful rule of thumb to flag the warning signs for wasted time.

Pareto Principle: 80% of the consequences come from 20% of the causes.” Also known as the 80/20 rule, the Pareto principle has its origins in work by economist Vifredo Pareto, who found that 80% of Italian land was owned by 20% of the population. The principle has been popularised in business as a tool for focusing on core contributors to problems. Facing a problem? Consider where 80% of the problem originates and focus there.

Ideation: Mental Models to Stimulate Ideas

When it comes to generating hypotheses and ideas, ideas from the world of mental models can also be of help. Entrepreneurs and scientists have drawn on mental models for millennia as the building blocks for generating fresh ideas.

First Principles Thinking: Most people build or copy the ideas of someone else. We break this cycle when we reason via first principles. We take things back to their fundamental truths and build new ideas from the core out. First principles thinking forces us to challenge what we think we know in order to innovate from scratch. Look no further than Elon Musk for a famous champion of this approach to reasoning.

Inversion: Quite simply, inversion is the art of flipping our perspective. If we’re asking ourselves how to solve a problem, inversion encourages us to flip the question and consider how we might fail to solve that problem. Inversion can help foster divergent thinking and creativity, in part because our brain loves novelty. Try reverse brainstorming, where only terrible ideas are welcome, to experience how inversion can shock the brain into action.

Backcasting: This approach asks us to envision a successful outcome and track back from that success to understand the decisions that led there. Backcasting is a useful way of mapping the path to success in reverse, highlighting opportunities we might not have seen had we mapped the path from A to B to C.

Testing: Mental Models to Test Choices

Mental models can also be used to test our choices before making them. They can be our canary in the coal mine, flagging issues before we commit.

This idea relies inextricably on the concept of thought experiments, which is the process of taking an idea or hypothesis and imagining its consequences. Let’s look at a few specific models.

Second-Order Thinking: First-order consequences are the direct impacts of a decision. Second-order thinking encourages us to look beyond first-order consequences to the next layers of consequences. You can imagine second-order thinking on a flowchart of choices followed by first-order consequences, and then consequences of those consequences, and so on. The basic principle is that we consider the cascading effects of our choices a little deeper.

Probabilistic Thinking. This is an approach that encourages us to assign probabilities to different outcomes of our choice. It can be usefully combined with second-order thinking by multiplying the probabilities in each layer.

Premortems: Here we imagine that our choice resulted in failure. We then work back from that failure to understand its causes. This is the opposite to backcasting (mainly used to generate solutions) and focuses instead on testing our proposed solution.

The Limitations of Mental Models

While this article has extolled the virtues of mental models, these models aren’t a silver bullet. Indeed, if we become too wedded to mental models, we paradoxically defeat their object: to encourage us to challenge assumptions and think differently.

What’s more, not all mental models are made for speed. Sometimes there simply isn’t time to conduct a range of thought experiments. Razors can be an effective aid for quicker evaluations, while the ideation and testing models tend to suit decisions with a longer time horizon.

What Next?

If you want to learn more about mental models, click the links above to see more detailed blog articles. Alternatively, you can explore the full psychology archives for detailed explorations of the most important cognitive biases and how to manage them.

For further reading, the following books provide comprehensive introductions to a wide range of mental models and thinking strategies.

Think Like a Rocket Scientist by Ozan Varol. A former rocket scientist shares his perspective on how to build, test and launch our rockets (ideas) using mental models.

Super Thinking: The Big Book of Mental Models by Gabriel Weinberg. An extensive look at mental models from physics, psychology and economics, among other areas.

The Art of Thinking Clearly by Rolf Dobelli. An entertaining introduction to cognitive biases and some of the mental models to help counteract them.

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