Mental models for understanding history, economics, and strategy

• Cognitive biases (general)
• Confirmation bias
• Motivated reasoning
• Availability heuristic
• Representativeness heuristic
• Anchoring & adjustment
• Hindsight bias
• Overconfidence
• Survivorship bias
• Selection bias
• Fundamental attribution error
• Halo effect
• Sunk cost fallacy
• Status quo bias
• Loss aversion
• Endowment effect
• Framing effects
• Dunning–Kruger effect
• Narrative fallacy
• Clustering illusion / pattern over-detection
• Induction vs deduction
• Correlation vs causation
• Confounders / omitted variable bias
• Reverse causality

• Basic probability
• Bayes’ rule / Bayesian updating
• Base rate neglect
• Expected value
• Variance / standard deviation
• Normal distribution (bell curve)
• Power laws (heavy tails)
• Pareto distribution
• Regression to the mean
• Law of large numbers
• Risk vs uncertainty (Knightian)
• Risk aversion / risk preference
• Kelly criterion

Decision theory

• Expected utility
• Opportunity cost
• Trade-offs and constraints
• One-way vs two-way door decisions
• Value of information
• Option value / optionality
• Marginal thinking

Canonical games

• Prisoner’s dilemma
• Stag hunt
• Coordination games
• Chicken / brinkmanship
• War of attrition
• Tragedy of the commons
• Public goods game

Information & strategy

• Signaling
• Screening
• Cheap talk
• Commitment strategies
• Credible vs non-credible threats
• Reputation in repeated games
• Principal–agent problem

• Goodhart’s law
• Systems thinking (general)
• Stocks and flows
• Reinforcing (positive) feedback loops
• Balancing (negative) feedback loops
• Delays and lags
• Non-linearity
• Thresholds / tipping points
• Path dependence
• Lock-in & increasing returns
• Emergence
• Bottlenecks / constraints
• Chokepoints
• Second-order effects
• Unintended consequences
• Map vs territory

Incentives & behavior

• Incentives / disincentives
• Moral hazard
• Adverse selection
• Soft budget constraints
• Hard budget constraints
• Rent-seeking
• Regulatory capture
• Career / bureaucratic incentives

Institutions & collective action

• Institutions as “rules of the game”
• Collective action problems
• Free-rider problem
• Olson’s logic of collective action
• State capacity
• Legitimacy vs coercion
• Federalism vs centralization

Other strategy / power

• Economies of scale
• Economies of scope
• Barriers to entry
• Network effects (direct / indirect / two-sided)
• Platform dynamics
• Bargaining power

• Price elasticity of demand
• Price elasticity of supply
• Cross-price elasticity
• Income elasticity
• Inflation
• Deflation
• Tax incidence
• Deadweight loss
• Externalities (positive / negative)
• Public goods vs common-pool resources
• Pigouvian taxes / subsidies
• Coase theorem
• Information asymmetry
• Adverse selection
• Moral hazard
• Principal–agent problem
• Market power / natural monopoly
• Price discrimination
• Two-sided / platform markets
• Comparative advantage
• Consumer surplus / producer surplus

• Gains from trade
• Comparative advantage in trade
• Terms of trade
• Tariffs
• Quotas
• Non-tariff barriers (sanctions, export controls, standards)
• Trade agreements (FTA, customs union, common market)
• Offshoring & global value chains
• Dutch disease

• Real vs nominal (rates, wages, GDP)
• Productivity & potential output (output gap)
• Stagflation
• Credit cycle (boom → leverage → bust → deleveraging)
• Leverage
• Liquidity vs solvency
• Lender of last resort
• Bank runs
• Deposit insurance
• Shadow banking
• Phillips curve (short-run, and breakdown)
• Automatic stabilizers

• Balance of payments (current vs capital/financial account)
• Real exchange rate (competitiveness)
• Capital controls
• Impossible trinity / trilemma
• Twin deficits
• Currency peg / currency board
• Sudden stop
• Currency crisis (devaluation / default dynamics)
• Original sin (borrowing in foreign currency)

• Capital deepening vs total factor productivity
• Diminishing returns to capital
• Catch-up vs frontier growth
• Convergence vs divergence
• Poverty traps
• Informal / shadow economy
• Industrial policy
• Income vs wealth inequality
• Gini coefficient (high-level)

• Tax base vs tax rate
• Laffer curve
• Progressive vs flat vs regressive taxation
• Debt-to-GDP ratio (debt sustainability framing)
• Seigniorage & inflation tax
• Time inconsistency
• Deficit bias
• Credible commitment (rules, independent central banks, currency boards, etc.)

• Monetary base / high-powered money
• Broad money (deposits)
• “Loans create deposits” / endogenous money
• Bank balance sheet basics (assets, liabilities, equity)
• Reserve requirements & interbank settlement
• Central bank tools:
  • Policy interest rate
  • Open market operations
  • Standing facilities
  • Quantitative easing
  • Lender of last resort
• Government deficits, bonds & monetization (“printing money”)
• Seigniorage
• Shadow money / private money (repo, MMFs, Eurodollars etc.)

Epistemics

• Models as simplifications
• Falsifiability
• Overfitting vs underfitting
• Steelmanning vs strawmanning
• Inside view vs outside view
• Reference class forecasting
• Expert consensus vs outlier views

Heuristics

• Heuristic concept
• Occam’s Razor

Forecasting

• Probabilistic forecasts
• Calibration
• Brier score
• Scenario planning
• Base rates and priors

State, regimes, institutions

• State capacity
• Rentier state
• Developmental state
• Failed state
• Legitimacy vs coercion
• Veto players
• Median voter theorem
• Overton window

Interstate logic

• Security dilemma
• Balance of power
• Deterrence
• Hegemonic stability
• Alliance politics (balancing vs bandwagoning)

Conflict & regime change

• Interstate war vs civil war
• Insurgency / guerrilla warfare
• Coup d’état
• Revolution

Empire / development structure

• Core–periphery
• Extractive vs inclusive institutions
• Spheres of influence

Social movements & demography

• Resource mobilization
• Political opportunity structure
• Framing
• Collective-action tipping points
• Demographic transition
• Age structure (youth bulge vs aging society)
• Urbanization

Meta-thinking

• Reasoning from first principles
• Reasoning by analogy (and limits)
• Assumption mapping
• Red teaming / adversarial thinking
• Changing your mind (updating without ego collapse)
• Habits vs one-off decisions

Light cog sci

• Fast vs slow thinking (dual-process, approximate)
• Working memory limits
• Attention as scarce resource
• Identity-protective cognition

Named models / “laws”

• Inversion
• Margin of safety
• Circle of competence
• Compounding / exponential growth
• Red Queen effect
• Innovator’s dilemma
• Creative destruction
• Lindy effect
• Skin in the game
• Chesterton’s fence
• Murphy’s Law
• Parkinson’s Law

Sun Tzu – The Art of War

• deception and surprise
• attacking weaknesses / avoiding strengths
• terrain, logistics, and positioning
• speed, morale, and timing

Machiavelli – The Prince

• how rulers / CEOs gain and keep power
• fear vs love / respect
• managing elites, coups, and factional politics
• patronage, purges, and legitimacy

Ries & Trout – Marketing Warfare

• offensive vs defensive strategy
• flanking moves and guerrilla positioning
• attacking the leader vs owning a niche

Hamilton Helmer – 7 Powers

• scale economies
• network economies
• counter-positioning
• switching costs
• branding
• cornered resource
• process power

Carl von Clausewitz – On War

• friction and “fog of war”
• center of gravity (what really matters)
• war as continuation of politics

Geoffrey Moore – Crossing the Chasm

• early adopters vs early majority
• the “chasm” between visionary users and pragmatic buyers
• beachhead strategies