Decision-Making With Mental Models
Any work that needs to be done requires the use of certain tools. For example, to write, one needs a pen, to fix a broken cup, one can use superglue, etc. Similarly, for decision-making, one needs to be equipped with the right tools. These tools are mental devices that one can use to make good decisions. While certain knowledge, ideas, and techniques can be used, one has to be able to understand which mental models can assure one of success.
These mental models help in upgrading one’s ability to think and handle the challenges that are thrown along the path of life. Humans have a whole toolbox of such mental models. The Great Mental Models (2019) by Shane Parrish and Rhiannon Beaubien, draws on a number of disciplines and gives the nine mental models that can boost one’s decision-making and thinking capacity.
Mental models can be considered like maps that help one navigate reality. While maps are navigational aids, they generally help one understand the benefits, basic features and limitations of mental models.
Maps represent the reality of the world around us in a more simplified manner. For example, the map of a city lines out its overall layout. Simple lines and squares representing roads, buildings, parks etc., are enough without having to include every detail. This simple representation is enough to get a person from point A to point B in the city.
In other words, maps are a simplified representation of the complex reality that surrounds us.
While a simple representation is enough, at times, one needs to include certain vital details in a map. For example, when a GPS device leads one to a closed road, one realises the importance of having an updated map. These details are equally vital to metaphorical maps that one uses. Instruction manuals, financial statements, and policy papers, all are simplified representations of reality.
These simplifications are meant to guide people through the complex world. Mental models need to be designed in the same way. They have to include the right details, leave out the clutter and need to be updated as well, as the world, and ones thinking changes.
The Circle of Competence
To navigate the complex world, one needs to use metaphorical maps. Let’s consider that that all the knowledge humans have about the world around them is a vast landscape, and one would need a map to navigate through it. Thus for cooking, one would need a cookbook, to manage and invest in a stick, one would need an investment manual, etc.
While one would need a map for navigating some places in the metaphorical landscape, some places would be so familiar, that a map would be unnecessary. These places (or actions) would be the skills that have been mastered throughout one’s life. These familiar, mastered places fall within one’s circle of competence.
One can move with confidence within this circle of competence. One knows what to expect and can easily navigate through any challenges one faces. However, outside this circle of competence, one feels baffled. For example, a plumber can easily understand whether the problem lies with the faucet, the pipe, or the drainage system. Whereas, the plumber will find it difficult to work out whether the problem is in the engine of the car, or the automation system, as the work of a mechanic lies outside his circle of competence.
Everyone has an area of ignorance, and not everything is known to one person. Hence, it is vital that one has an idea as to where one’s circle of competence begins and ends. One simply has to be honest about one’s limitations in order to be able to focus on one’s strengths, and know when to seek help with areas in one is weak.
For example, if one wants to better finances, and is weak at numbers, hiring a personal financial consultant, or even reading up a bit on the subject could help one navigate around the basics. In this manner, even if one is outside one’s circle of competence, one won’t feel completely disoriented.
That said, it is essential that one understands when one is outside one’s circle of competence. It is unfortunate that human egos tend to make humans believe that one’s circle of competence is wider than it actually is. Due to this misguided perception, many tend to venture out of their comfort zones with confidence, totally clueless that they are out of depth. A stark reminder of this is the 200 or so frozen bodies that are dotting the landscape of Mount Everest! Each of those who perished probably felt confident about their abilities to conquer the mountain.
Creativity, And Reasoning From First Principles
There is more to success than just focusing on one’s circle of competence. In order to succeed, one also needs to be creative. Thinking out of the box is but an important cliché. Without it, one cannot break away from the common and will end up doing the same thing that everyone does. And this includes the mistakes!
One has to begin with digging deep and creatively reason from the first principles.
The first principles are the foundational facts that are the base of the knowledge of any field. For example, understanding the laws of thermodynamics is the first principle for an engineer who wants to build a refrigerator.
The first principles of any field can also be found in less obvious domains, which often lead to creative solutions. For example, a scientist trying to solve the environmental impact of livestock farming and overconsumption of meat will try to first go back to thinking about how can the consequences can be mitigated.
On the other hand, the scientist could also approach the matter differently, by asking, “What are the first principles of meat consumption?”
The scientists of the 1970s started with this very question. They learned that for consumers, it is the smell and the taste that matter more than whether the meat comes from an animal or not. They learned that these aspects of the meat depend on reactions and chemical properties that take place between the amino acids and sugars when meat is cooked. Thus they started experimenting with ways of creating artificial meat grown in labs, that not only replicate the smell and taste but also do away with the need to kill animals.
This realization has led to over 30 labs across the world that are developing artificial meat presently.
Approaching any problem by understanding the first principles – essentially, starting with the underlying cause, rather than trying to solve its effects – helps in preventing it from becoming a problem in the first place, creatively.
In the 1920s, Edward Bernays, an Austrian-American PR and propaganda pioneer, was faced with a question. How to sell more Lucky Strike cigarettes to women in an age where most smokers were men. Bernays used an effective mental model called inversion that involved approaching a problem by turning it upside-down.
In an inversion, the first trick is to assume that something is true, and then work backwards to prove what else could have to be true to arrive at the same truth. Bernays started by thinking, ‘Assuming women smoke as much as men, what else would have to be true?’
He arrived at the conclusion that women would need to feel that smoking was socially desirable and acceptable, and hence would be needed to link with other things that were socially desirable and acceptable. Bernays then advertised Lucky Strike cigarettes as an ‘after-dinner treat’ that would replace desserts – an elegant manner of keeping a slim figure. He further portrayed smoking as a way for women to show independence (as the women’s rights movement was on the march) and marketed cigarettes as ‘torches of freedom’.
The second trick in inversion is to assume the opposite of what one wants to achieve, and then see what needs to be proved true for the case to happen. For example, if one wants to get rich, one has to assume one is poor and then think backwards as to what actions lead to poverty. Thus, if one thinks that spending more than what one earns or taking high-interest loans will lead to poverty, these, and all other behaviours that one list could be avoided to get rich.
With all the creative ideas that one can conjure by using the aforementioned techniques, one has to have a clear idea of how these should be carried out in reality. In order to do this, one should first simulate them in one’s mind.
Simulating these experiments in one’s thoughts has a clear advantage over trying them out first. For starters, one can imagine taking risks without actually bearing the consequences. Moreover, these experiments can be conducted in one’s mind over and over again – without wasting time or resources. This enables one to think of the impossible or even the impractical!
For example, Einstein actually came up with the general theory of relativity using thought experiments. He thought if a person was put in an elevator with their feet glued to the floor, and the elevator was transported into space and pulled upwards at an accelerating rate, would the person be able to notice it, or would the person feel like being pulled by the gravitational force of the Earth? This thought, as absurd it may sound, helped him work out his ideas about gravity.
Similarly, thought experiments enable one to think of impossible ideas, and at the same time clarify ones thinking. Moreover, they help one understand the value of things.
Consider a person who has won a lottery. Let’s say this person thinks of using that money to buy a house. He next thinks of the consequences of buying the house. He might either need to spend more time cleaning., or hire house help.
Whatever, the person thinks, the person has gone from thinking about the consequence of winning the lottery, to thinking about the consequences (more cleaning time or hiring house help) of the consequence (winning the lottery). This is known as second order-thinking.
In second order-thinking, one looks at a problem by considering its absence. Now in livestock farming, , when dairy farmers first started using antibiotics, they focussed on the first-order consequences – which were better milk production and stronger cattle. However, as they eyed bigger profits, the second-order consequences started to show effect. Some bacteria resisted the antibiotics, and these drug-resistant bacteria entered the human food chain.
Though unintentional, had the farmers considered the potential second-order consequences, things would be different. Hence in decision-making, thinking about second-order consequences is vital, as they could have negative outcomes, and reassessment will be essential.
However, second-order consequences can also be positive, enabling one to use them to bolster arguments in favour of any decision. To make good decisions, one often needs to rope in other people, for example, to get a partner convinced to try a new parenting technique.
Mary Wollstonecraft, philosopher and the author of A Vindication of the Rights of Woman, argued in her book that giving women equal rights as men is not only morally correct but will also be beneficial for society later. She essentially used the positive second-order consequences to plead her case in the book.
While weighing the pros and cons of the second-order consequences, one has to be careful to overthink or overreact by drawing extreme conclusions, or excessively guarding oneself against them. One can get paralysed with indecision.
For example, an overreaction to thinking about the second-order consequences of having a drink would be to think of alcoholism and advocate for prohibition. If one has to be rational while decision-making, one can use probability or probabilistic thinking.
To get better at probabilistic thinking, one can use the Bayesian updating approach. In this approach, one thinks that they have all the information about the world. Though it is limited, it could also be useful, and one should make the most of that information one has. Hence when one gets access to any new information, one has to comparatively assess it with the prior information before reaching a conclusion.
For example, a person sees a report in the newspaper, “Violent crimes are skyrocketing.” Rather than panic and vow to never go outside, if the person is a Bayesian thinker, the person will start tabulating the previous crime rate and compare it with the doubled rate of crime. So if the crime rate – which was declining in the past decade – was at 0.1%, at a doubled rate, it would be 0.2%. that would indicate that 2 out of every 10000 people would be probable victims of violent crime. The person would have a very slim chance of being a victim.
That said, one cannot dismiss the new information altogether. Change is a constant and one needs to keep updating oneself from time to time.
Thus, the word ‘skyrocketing’ should only diminish the person’s belief that the crime rate is low by little. It actually tells the person that the crime rate is only slightly higher than what the person earlier believed and that one has to only slightly adjust one’s belief.
Now in case, the person continues to see news reports that tell of increasing crime rates, the person will have to replace his belief about the crime rate being low altogether. The person should then, based on the new information, exercise caution while venturing outside.
Consider a person waking up feeling sick. The person does a quick google search of the symptoms experienced and gets 2 results – flu or Ebola. Which result should the person believe? The answer is important, as it could be the difference between popping paracetamol and heading back to bed, or going into quarantine!
Such scenarios are different from probabilistic thinking where one has to weigh only one piece of information. Here, one has to decide between 2 explanations for the evidence in hand. In such scenarios, one can use Occam’s razor.
Occam’s razor tool, when given two explanations that equally account for the facts in hand, considers the simpler explanation to be true. The tool’s basic idea is that the explanation that is more complicated, has more variables attached for it to be true. With each additional variable, the explanation seems more unlikely to be true.
For example, if a friend hasn’t shown up at the time that was decided, one has two explanations – either the friend is running late, or has gotten into an accident. With the second explanation, many variables such as – did the friend leave his house, was driving, did the friend caused the accident or another driver, etc. – have to be accounted for it to be true. The first explanation that the friend is running late, is simpler and hence more likely to be true.
However, one cannot completely dismiss the second explanation as impossible. It is just the case that simpler explanations are true more often than complicated ones.
While Occam’s razor is a great tool for decisions that have competing explanations, human behaviour is varied, needing another tool.
Hanlon’s razor, similar to Occam’s razor, believes that keeping all things equal, the simpler explanation is true, and thus the safer bet. However, it adds a small twist. It states that acts of wrongdoings or decisions are more an outcome of stupidity and mistakes than malicious intent.
For example, let’s consider a person driving a car gets speedily cut off by another person. Before the person actually speeds up to follow the other car and take revenge, the person should consider what could be the reason for the behaviour of the other driver.
There could be 2 explanations. Either the person acted in malice and had some evil intention, or it was just a stupid mistake.
With the first explanation, the other driver’s act would have to fulfil a host of conditions for it to be true. The person would have had to follow the car, had a desire to cut off, conjured up a plan to act on that desire, and then manoeuvres his own car dangerously to fulfil it. The second explanation is simpler to believe.
Mistakes are a lot easier to make and more common than detailed planning for intentional acts of wrongdoing. While people can be evil on purpose, thinking of it as a mistake, is simply a healthy way of remembering that wrongdoers are exceptions in a world of people who make mistakes. One shouldn’t jump to conclusions and assume the worst of others.
Mental models can be used to navigate the complicated reality that surrounds us. Every model, with its specific uses, limitations and strengths, can be applied to decision-making to sharpen ones thinking, develop knowledge, and have a better understanding of the world around, and in turn, enable people to make better decisions to succeed in life.