15 Mental Models Examples In Everyday Life

Examples of Mental Models And Mindset

You know mental models have been a topic of discussion for a while now and for good reason. They help us to understand how people think and what Spur them to do what they do. Have you ever wondered what happens in successful people's minds and what they have in common? No matter how diverse their actions might seem. Everyone will often fit into one of the categories.

Incentive

The concept of incentives holds that you persuade individuals to take action by promising to reward them with something they want. We humans by default act in our own self-interest. Incentive as a mental model is used by successful people to achieve their set objectives by giving others a reason to do as they ask. Successful people often ask themselves how they can satisfy the needs of those working for them. They can be in the right mental space to work better for the business. Most importantly they always find ways to prevent their strategy from failing due to the discrepancies between other people's incentives and theirs.

Margin of Safety

margins of safety are thought patterns that encourage the adoption of backups and fallbacks in the event of a system failure or other unplanned circumstances. If you need to build a bridge to carry three-ton trucks. Planning with a margin of safety could look like building a bridge to hold 10 tons altogether. Redundancy and margin of safety are related concepts but instead of creating a backup copy of a system's essential components. The margin of safety requires planning for extra space and is actually required.

Preferential Treatment

Imagine a race between two runners. Water and energy bars are awarded to the first runner to cross the one-mile marker while the other people receive nothing. This is what's known as preferential treatment. We see preferential treatment in business when the best performing assets are given the most resources to get even better. Successful people use this in a variety of ways. When they believe they should consolidate the losses in an area that they are not good at they pour resources into their best performing gigs. Then they observe when the attention is given to something and divert this effort to other areas if needed. The temptation to just serve material to your most qualified leads might be strong. However, in the process, you could be overlooking those who are just starting to learn about your company or who took a little longer to open emails and download particular information.

Feedback Loop

Picture yourself wearing a blindfold. Noise canceling headphones and wandering through a completely furnished room with your arms tied behind your back. After about 20 tries of making it across the room, you'll learn an important but probably painful lesson on the value of feedback loops in directing the action. Feedback loops are created when the results of a process affect the inputs of the same process. For example, your thermostat. Every system in the real world has a feedback loop of some kind. Feedback loops can be positive or negative and successful people use feedback loops to evaluate the progress they've made in a particular time toward their goals.

Curiosity Instinct

Although we see other animals like cats as curious beings. We are actually the most inquisitive living thing on the planet as far as we know. This curiosity propelled us out of the prehistoric era and enabled us to learn a great deal about the environment around us. Women invented stuff out of curiosity even before there were clear financial incentives to do so. Have you ever noticed how inquisitive many successful people tend to be? Well, it's actually a given curiosity that tends to promote knowledge seeking. It's the healthy kind no matter how steep the learning curve might be or how difficult situations might present themselves. One will be encouraged to find solutions.

Supply and Demand

There's a finite quantity of resources at any given time and competition for them is a fundamental constant in our ever-evolving world. Organizations battle for limited client wealth and limited demand for their products. Much like biological organisms do for limited useful energy. A market is a collection of consumers and providers of a certain item or service. The supply of the commodity is decided by the sellers collectively. The demand for it is decided by the buyers collectively. Successful people always consider the supply and demand in a market when formulating their plans. That's why they always seem to be prepared for whatever happens.

Jealous Tendency

Jealousy results in one of two things. Either is motivation to put yourself on another person's level. Which is the beneficial kind or the destructive kind. Where one has the desire to steal and creates unhealthy competition amongst people. Successful people Channel their jealousy in a way that lets them work harder and improve their craft. They're also careful of how they take on the competition drawing a line where they believe it to be unhealthy. People often feel jealous of others who have more than them and want to obtain what is theirs eventually. Although it is as ancient as mankind itself the impulse toward jealousy is powerful enough to motivate. Otherwise illogical actions over time any system that is unaware of the repercussions of jealousy will often set itself on fire.

The Pareto Principle

According to the Pareto Principle, about 80 percent of the consequences result from 20 percent of the causes. Wilfredo Pareto was an Italian economist who made this discovery in 1906. In his observations, he noted that 20 percent of Italy's people held 80 percent of the country's land. He noticed that this distribution was consistent throughout every sector. Successful people used the Pareto Principle to concentrate on a small number of high performing Endeavors in order to get the best outcomes where they can get the most value for what they do 20 percent of their time.

Tribalism

Organizations are like tribes and tribal leaders have a more significant impact than others on the culture of their own tribe. Successful and ambitious leaders concentrate on developing adapting and upgrading the tribal culture of their team and this drives up their productivity. Like a feedback loop, the tribe rewards them with loyalty and greater success. Although tribal allegiances spur many honorable actions they can influence people to forego good judgment and judgment accuracy in favor of a sense of belonging and Devotion to a group.

Compounding

No Financial advice is complete without a detailed explanation of the power of compounding interest but it goes far beyond finances. In practically every situation where exponential growth is observed. Years of compounding are credited whether it be riches relationships health or skills. Successful people compound their gains preferring modest consistent improvement over dramatic increases that cannot be sustained. We're easily tempted to look for quick visible solutions to things. Compounding interest helps us to grow without losing what we already have.

Mental Models: Pavlovian Association

Remember the famous dogs salivating at the sound of a bell? Yvonne Pavlov very persuasively proved that animals might respond not just to direct rewards but also to related items. Like other living things humans can feel both Pleasant and negative emotions toward immaterial objects. These feelings are based on prior associations rather than the actual current event. Successful people condition their minds to act automatically in certain conditions. In sports, it's called muscle memory that's gotten from constant practice.

Mental Models: Inversion

The stoics held that by anticipating the worst case situation. One might conquer one's dread of unpleasant events and develop better preparation to avoid them. The stoics thought about how they would handle failure while other people concentrated on how they could succeed. Inversion is the process of thought in which you contemplate the opposition to what you really desire. If you want to enhance teamwork well consider what could inhibit or hamper collaboration and steer clear of those things. You desire project success. Well, what obstacles will you face along the way for every problem a solution is put in place? People often mistake stoicism for nihilism and as a result, they think inversion is a bad thing.

Mental Models: Surfing or Riding the Wave

In his presentation on Elementary worldly wisdom. Charlie Munger utilized the metaphor of Surfing to convey the concept of a developing powerful commercial force that a firm May ride to grow. Surfers ride with the wave's natural tide not against it and don't attempt to control its tremendous ocean current. Successful people know how to ride the waves of their emotions without disrupting their productivity. No one can be in Tip-Top shape all year long. In those dark times when you want to quit riding out, the wave is the best course of action. Embracing your emotions yet performing efficiently that's what it means to ride the wave.

Mental Models: Working Backward

The backward working method is if there ever was a hidden ingredient in what major companies like Facebook and Amazon do. These companies are successful because they always manage to find unique solutions to troublesome problems. Successful people ask themselves what the ideal product should include. What resources do we have right now? From then on they connect the dots although they have many similarities working backward and with inversion are fundamentally distinct.

Mental Models: Scarcity

According to the scarcity principle when opportunities are more scarce people place a higher value on them. This Prejudice results from a universal human propensity to avoid losses. Successful people make themselves reasonably scarce for people that need them the most. They know that if they're readily available to render their services their value will drop over time.

Conclusion

Our understanding of the world is based on mental models. They influence not just the way we interpret and think but also the connections and opportunities that we see. No mental model is perfect and you know oftentimes they could cause someone to fail due to misuse. However, the finest mental models from those fields have helped us to build roads and bridges create new technologies, and even travel to different planets.

FAQs

What is a mental model provides a real life example?

Mental Models provide to understand of how we gain success in our life and take successful decisions in our life. For Example Margin Of Safety. Planning with a margin of safety could look like building a bridge to hold 10 tons altogether. Redundancy and margin of safety are related concepts but instead of creating a backup copy of a system's essential components.

What are the 5 mental models?

Here are in detail the best 5 mental models examples in everyday life.

1. Margin Of Safety
2. Preferential Treatment
3. Feedback Loop
4. Supply And Demand
5. Incentive

Who discovered mental models?

The mental model theory was developed by Philip Johnson-Laird and Ruth M.J. Byrne (Johnson-Laird and Byrne, 1991).