“I often like to think in terms of these three options when I have a big decision to make.
I can call. I can maintain the status quo and keep my energy investment the same as before. I can raise. I can escalate the situation and put more energy into it. Or I can fold by exiting the situation…
…Most of the time you should be thinking: raise or fold. This is because when a choice seems difficult, it’s usually because the best option is to raise or fold, and you’re not sure which is best.
So if you find yourself at a crossroads, consider that you may really have just two viable options: raise or fold. Go big or go home…
When you’ve decided that it’s time to fold, you may have a tendency to keep asking yourself, But if I fold this hand, then what will I have left? If I fold my job, how will I pay my bills? If I fold my relationship, then who will love me again?
And the answer is simple. Just get back into the game, and you’ll be dealt a fresh hand. A fresh hand brings fresh hope. A weak hand doesn’t.”-Steve Pavlina, “Call, Raise or Fold.” StevePavlina.com. January 30, 2020.
We often make assumptions that are reasonable in one context, abstract it into a guideline and apply that guideline to a new situation. Often, it is difficult to assess whether these situations are close enough to apply what we know to what we don’t.
At base, this is the problem of induction. There is no rational basis to argue from circumstances we have experienced to another situation we have not.
But, we’ve all done it. Life presents us with situations where we have to make an intuitive leap that is good enough to get us to a good outcome, better than if we made assumptions based on the probabilities of random chance. However, the post from today on How Not to be Stupid suggests elements that undermine our ability to make these intuitive leaps, such as:
- We are applying it to something new. Hard to assess something that you have no experience with.
- It is a high stress situation. When the stakes are high, it is easier to make mistakes.
- We need to make a decision quickly. It’s just a form of stress.
- We are invested in a particular outcome, i.e., it is hard to get someone to see something that their livelihood depends on them not seeing.
- There is too much information to consider. When it is all noise and/or all signal it is difficult to figure out what to use to inform our intuitions and pare it down to what is essential.
- There is social suasion in the form of individual and group dynamics that influence us in particular directions
When the whole enterprise is compromised, it is hard to realize when you have moved from a place to engage in reasonable guesswork and when you have come completely unmoored. The first indication that this is the case is when you are wrong more often than average, which means you need to track how well your decisions do and get feedback into your system. Otherwise, you might never realize the extent that you are cognitively compromised.
“A mental model is an explanation of how something works. It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things. Mental models are deeply held beliefs about how the world works…
…To quote Charlie Munger again, ’80 or 90 important models will carry about 90 percent of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight…’
…My hope is to create a list of the most important mental models from a wide range of disciplines and explain them in a way that is not only easy to understand, but also meaningful and practical to the daily life of the average person. With any luck, we can all learn how to think just a little bit better.”
—James Clear. “Mental Models: How to Train Your Brain to Think in New Ways.” Medium.com. February 15, 2018.
His list of the most useful mental models might warrant revisiting every now and again.