September 2017

The U.S. Government’s Stupidest Mistake -Mental Model 023

Hanlon’s Razor*

Never attribute to malice that which is adequately explained by carelessness or stupidity.


Hanlon’s Razor Example:

The failed Bay of Pigs Invasion was planned to be a combined effort between U.S. trained mercenaries in Cuba with U.S. air support flying in from Nicaragua. But the air support arrived 1 hour late. Government conspiracy? No. They were late because nobody accounted for the time difference between Cuba and Nicaragua.



“Never ascribe to malice that which is adequately explained by incompetence.” — Napoleon Bonaparte, leader of the French revolution in the early 1800s & one of the greatest military Generals to ever live


Read more:

> Hanlon’s Razor on Wikipedia

> Hanlon’s Razor on Farnam Street Blog


* A razor is a fancy philosophical way of saying ‘rule of thumb’ or ‘principle’.


The Statistics Of Boring -Mental Model 022

Normal Distribution

A normal distribution is an arrangement of a data set in which most values cluster in the middle of the range and the rest taper off symmetrically toward either extreme.


Normal Distribution Example:

Most people are average height, while the number of people taller and shorter than the average are roughly equal. Furthermore, the number of extremely tall or extremely short people is relatively small.


Aka: The Bell Curve



“An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.” — John Tukey


Read more:

> Normal distribution on Wikipedia.

Why A Bird In Hand Is Worth More Than Two In The Bush -Mental Model 021

Time Value of Money

Money is worth more now than in the future because you can earn interest or invest it.


Time Value of Money Example:

Given the choice between accepting $100,000 today, or $102,000 in one year, we are better accepting the money today. This is because by investing the $100,000 for one year, on average, we will have $107,000 by the end of the year.



“Every time you borrow money, you’re robbing your future self.” — Nathan W. Morris


Read more:

> Time value of money on Wikipedia.


Why We Judge Others Harsher Than Ourselves -Mental Model 020

Fundamental Attribution Error

“When we look at others we see personality traits that explain their behaviour, but when we look at ourselves we see circumstances that explain our behaviour … we explain by permanent, enduring traits what would be better explained by circumstance and context.” — Eliezer Yudkowsky.


Fundamental Attribution Error Example:

In an experiment, participants read essays that were positive towards Fidel Castro and essays that were negative. When they were told people had freely chosen to write pro Fidel Castro essays—they rated the writer to personally hold positive attitudes towards Castro (as we would expect). But when people were told the writer’s position on Castro—positive or negative—was determined by a coin toss, they still rated writers of pro Castro essays as having a more positive attitude towards him. They ignored the context of the participants behaviour.



“Most of the evil in this world is done by people with good intentions.” ― T.S. Eliot, British essayist, publisher, playwright, literary and social critic, and “one of the twentieth century’s major poets”


Read More:

> Fundamental attribution error on Wikipedia

> Fundamental attribution error on Farnam Street Blog

> Correspondence Bias on Less Wrong


Also Known As:

Correspondence bias, attribution effect

Why The Truth About 9/11 Is Hard To Believe -Mental Model 019

Occam’s Razor

Among competing hypotheses, the one with the fewest assumptions should be selected.


Occam’s Razor Example:

There’s a conspiracy theory that the terrorist attacks on September 11, 2001, were orchestrated by the U.S. Government. This theory assumes the U.S. government was willing to harm thousands of its own citizens, that they hid explosives in the World Trade Centre to help them fall, and that they have managed to successfully hide all the evidence of this conspiracy.

Another hypothesis is that a group of terrorists wanted to attack American and successfully did so by hijacking commercial planes.


This second hypotheses has fewer assumptions. It should be selected.



“The simplest explanation is usually true.” —  William of Ockham


Read More:

> Occam’s razor on Wikipedia.

> Occam’s razor on Farnam Street Blog.

Why Popularity Doesn’t Matter in 2017 -Mental Model 018

Long Tail

The large number of products that sell in small quantities (niche products) can exceed the sales volume of a few best-selling products.


Long Tail Example:

The average Barnes & Noble carry 130,000 books. That sounds like a lot, but is actually quite limited when we consider the millions of books in the world. Instead of being limited by the physical space of a bookstore, the online retailer Amazon can list every single book in the world.


Amazon still sell the same 130,000 books as Barnes & Noble. In fact, they’re the most popular books and contribute around half of the book sales on Amazon. But the remaining 50% of books sold on Amazon doesn’t come from another 130,000 books… it comes from millions of books.



“Up until now, the focus has been on dozens of markets of millions, instead of millions of markets of dozens.” — Joe Kraus


Read more:

> Long tail on Wikipedia.

Why Your Extra Effort Is A Waste Of Your Time -Mental Model 017

Diminishing Returns

Beyond a certain point, the rate of profit, production, or benefit fails to increase proportionally with added investment, effort, or skill.


Diminishing Returns Example:

A farmer with 1,000 acres and 10 workers is yielding the maximum output of each worker—100 acres. If the farmer hires 2 more workers, his farm will be less efficient as each worker only has to look after 83 acres—17 acres less than their maximum output.



“The Law of Diminishing Returns is true of everything in life, except sex, which seems endlessly repeatable with effect.” ― Robert McKee, Story: Style, Structure, Substance, and the Principles of Screenwriting


Read more:

> Diminishing returns on Wikipedia.

Can You Solve The Riddle Of Theseus’s Ship? -Mental Model 016

Thought Experiment

Imagining the potential consequences of an action.


Thought Experiment Example:

Theseus Ship is a famous thought experiment. A ship’s sail breaks, so it’s replaced. It’s floorboards rot, so they are replaced. Eventually, every piece of the ship is replaced. Is it the same ship?


Our bodies are the same. Every seven years our bodies are an entirely new collection of cells. Are we the same person?



“Strap a piece of toast -buttered side up- to the back of a cat. Throw the cat out of the window. Will the cat land on its feet or will Murphy’s law apply?” ― Alan Fletcher


Read more:

> Thought experiment on Wikipedia.


When Small Improvements Can have A Huge Impact -Mental Model 015

Theory of Constraints

A management system is limited in achieving its goals by a small number of constraints.


Theory of Constraints Example:

In the 1920’s, Ford was upping the production of its Model T’s. But the paint would take so long to dry it held up production. In manufacturing, this constraint is known as a bottleneck. Engineers decided to use a faster drying paint which allowed Ford to achieve its goal of increased production.



“A chain is no stronger than its weakest link.”


Read more:

> Theory of constraints on Wikipedia.

The Fake Afghan Village In The United States of America -Mental Model 014


The imitation of a real-life situation or system.


Simulation Example:

In the Mojave Desert in California, there is an army base that has an entire fake Afghan town. Soldiers conduct military simulations in the town, enacting scenarios they will encounter when deployed overseas.



“All models are wrong, but some are useful.” — George E. P. Box


Read more:

> Simulation on Wikipedia.