Mental Models: Learn How to Think Better and Gain a Mental Edge

Definition: What Are Mental Models?

Let’s start with a definition. What are 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 help you understand life. For example, supply and demand is a mental model that helps you understand how the economy works. Game theory is a mental model that helps you understand how relationships and trust work. Entropy is a mental model that helps you understand how disorder and decay work.

Mental models also guide your perception and behavior. They are the thinking tools that you use to understand life, make decisions, and solve problems. Learning a new mental model gives you a new way to see the world—like Richard Feynman learning a new math technique.

Mental models are imperfect, but useful. There is no single mental model from physics or engineering, for example, that provides a flawless explanation of the entire universe, but the best mental models from those disciplines have allowed us to build bridges and roads, develop new technologies, and even travel to outer space. As historian Yuval Noah Harari puts it, “Scientists generally agree that no theory is 100 percent correct. Thus, the real test of knowledge is not truth, but utility.”

The best mental models are the ideas with the most utility. They are broadly useful in daily life. Understanding these concepts will help you make wiser choices and take better actions. This is why developing a broad base of mental models is critical for anyone interested in thinking clearly, rationally, and effectively.

Mental Models Example

How to Train Your Brain to Think in New Ways – This article shares some useful examples of how mental models work (and how the right mental model can make a big difference).

The Big Mental Models

There are thousands of mental models, but the best ones apply broadly to life and are useful in a wide range of situations.

Of all the mental models humankind has generated throughout history, there are just a few dozen that you need to master to have a firm grasp of how the world works. To quote Charlie Munger, “80 or 90 important models will carry about 90% of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.”

After many hours of research, I have sorted through more than 1,000 mental models and distilled them into a short list of the most important mental models for daily life.

I am only included the most important and useful mental models on this page. I have separated them out by industry below.

Mental Models in Business

Economics

• Common Knowledge
• Comparative Advantage
• Diversification
• Economies of Scale
• Efficient Market Hypothesis
• Game Theory
• Incentives (Reward and Punishment)
• Scarcity
• Supply and Demand

Psychology

• Anchoring
• Classical Conditioning (Pavlov)
• Commitment and Consistency Bias
• Hyperbolic Discounting
• Illusion of Control
• Loss Aversion
• Maslow’s Hierarchy of Needs
• Mere Exposure Effect
• Operant Conditioning (Skinner)
• Reciprocity
• Status Quo Bias
• Survivorship Bias
• Tribalism

Thinking

• The Scientific Method
• Inversion
• Surfing or “Riding the Wave”
• Working Backward

Mental Models in Science

Biology

• Evolution by Natural Selection
• Equilibrium (Homeostasis)
• Heredity
• Signalling

Chemistry

• Activation Energy
• Atomic Theory
• Autocatalysis
• Entropy (The Second Law of Thermodynamics)
• Catalysts

Physics

• Critical Mass
• Relativity
• Velocity

Mental Models in Math and Engineering

Engineering

• Break Points
• Leverage
• Margin of Safety
• Redundancy

Mathematics

• Normal Distribution (Bell Curve)
• Permutations and Combinations
• Power Laws

Best Mental Models Books

• Seeking Wisdom by Peter Bevelin
• Poor Charlie’s Almanack by Charles Munger
• The Personal MBA by Josh Kaufman
• The Fifth Discipline by Peter Senge

Want more? Browse my full list of the best business books.

All Mental Models Articles

This is a complete list of articles I have written on Mental Models. Enjoy!

• First Principles: Elon Musk on the Power of Thinking for Yourself
• Mental Models: How to Train Your Brain to Think in New Ways
• Entropy: Why Life Always Seems to Get More Complicated
• Inversion: The Crucial Thinking Skill Nobody Ever Taught You
• A Margin of Safety: How to Thrive in the Age of Uncertainty
• All Models Are Wrong, Some Are Useful
• How to Spot a Common Mental Error That Leads to Misguided Thinking

Or, browse my best articles.