Mental models for understanding history, economics, and strategy
This is a working list of models used in Logic Atlas cases. Some already have full pages; others are planned.
Cognition, Biases & Reasoning
- 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
Probability, Distributions & Uncertainty
- 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 & Game Theory
- Credible commitment
- Principal–agent problem
- Expected utility
- Opportunity cost
- Trade-offs and constraints
- One-way vs two-way door decisions
- Value of information
- Option value / optionality
- Marginal thinking
- Prisoner’s dilemma
- Stag hunt
- Coordination games
- Chicken / brinkmanship
- War of attrition
- Tragedy of the commons
- Public goods game
- Signaling
- Screening
- Cheap talk
- Commitment strategies
- Credible vs non-credible threats
- Reputation in repeated games
Systems & Complexity
- 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
- Slowly, then all at once
Incentives, Institutions & Power
- Soft budget constraints
- Rent-seeking
- Institutions as “rules of the game”
- Regulatory arbitrage
- Sovereign customer-regulator risk
- Incentives / disincentives
- Moral hazard
- Adverse selection
- Hard budget constraints
- Regulatory capture
- Career / bureaucratic incentives
- Collective action problems
- Free-rider problem
- Olson’s logic of collective action
- Federalism vs centralization
- Economies of scale
- Economies of scope
- Barriers to entry
- Network effects (direct / indirect / two-sided)
- Platform dynamics
- Bargaining power
Markets, Trade & Microeconomics
- 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
- Market power / natural monopoly
- Price discrimination
- Two-sided / platform markets
- Comparative advantage
- Consumer surplus / producer surplus
- Gains from 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
Growth, Development & Distribution
- Catch-up growth
- Capital deepening vs total factor productivity
- Diminishing returns to capital
- Convergence vs divergence
- Poverty traps
- Informal / shadow economy
- Industrial policy
- Income vs wealth inequality
- Gini coefficient
Public Finance & Policy
- 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
Monetary & Financial Systems
- 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)
- Monetary base / high-powered money
- Broad money (deposits)
- “Loans create deposits” / endogenous money
- Bank balance sheet basics (assets, liabilities, equity)
- Reserve requirements & interbank settlement
- Policy interest rate
- Open market operations
- Standing facilities
- Quantitative easing
- Government deficits, bonds & monetization (“printing money”)
- Seigniorage
- Shadow money / private money (repo, MMFs, Eurodollars etc.)
Epistemics, Heuristics & Forecasting
- Models as simplifications
- Falsifiability
- Overfitting vs underfitting
- Steelmanning vs strawmanning
- Inside view vs outside view
- Reference class forecasting
- Expert consensus vs outlier views
- Heuristic concept
- Occam’s Razor
- Probabilistic forecasts
- Calibration
- Brier score
- Scenario planning
- Base rates and priors
History & Politics
- State capacity
- Legitimacy vs coercion
- Security dilemma
- Balance of power
- Rentier state
- Developmental state
- Failed state
- Veto players
- Median voter theorem
- Overton window
- Deterrence
- Hegemonic stability
- Alliance politics (balancing vs bandwagoning)
- Interstate war vs civil war
- Preventive war
- Insurgency / guerrilla warfare
- Coup d’état
- Revolution
- Core–periphery
- Extractive vs inclusive institutions
- Spheres of influence
- Resource mobilization
- Political opportunity structure
- Framing
- Collective-action tipping points
- Demographic transition
- Age structure (youth bulge vs aging society)
- Urbanization
Media, Propaganda & Information Systems
- Medium is the message (McLuhan)
- Media ecology (structure of communication environments)
- Agenda-setting (what to think about)
- Manufacturing consent / propaganda model
- Gatekeeping and news selection
- Disinformation vs misinformation
- Spiral of silence
- Filter bubbles & echo chambers
- Information cascades
- Virality & memetics
- Information warfare / psychological operations
Meta-Thinking & Named Models / Laws
- Reasoning from first principles
- Reasoning by analogy (and limits)
- Assumption mapping
- Red teaming / adversarial thinking
- Habits vs one-off decisions
- Fast vs slow thinking
- Working memory limits
- Attention as scarce resource
- Identity-protective cognition
- 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
- Window of opportunity
Firm Strategy & Competition
- Succession risk / Buddenbrooks effect
- Concentration risk
- Porter’s Five Forces
- Value chain analysis
- Disruptive innovation (Christensen)
- Business model innovation
- Unit economics
- Market segmentation & positioning
- Moats (durable competitive advantage)
- Switching costs (customer lock-in)
- Network effects as competitive advantage
- Kill chain
Long-Run Historical Drivers
- General-purpose technologies (GPTs)
- Energy regimes (biomass → coal → oil → renewables)
- Globalization waves
- Resource curse / resource abundance
- Population growth & Malthusian constraints
- Institutional path dependence
- Geography & transport costs
Playbook - Sun Tzu – The Art of War
- deception and surprise
- attacking weaknesses / avoiding strengths
- terrain, logistics, and positioning
- speed, morale, and timing
Playbook - The Prince
- how rulers / CEOs gain and keep power
- fear vs love / respect
- managing elites, coups, and factional politics
- patronage, purges, and legitimacy
Playbook - Marketing Warfare
- offensive vs defensive strategy
- flanking moves and guerrilla positioning
- attacking the leader vs owning a niche
Playbook - 7 Powers
- scale economies
- network economies
- counter-positioning
- switching costs
- branding
- cornered resource
- process power
Playbook - On War
- friction and “fog of war”
- center of gravity (what really matters)
- war as continuation of politics
Playbook - Crossing the Chasm
- early adopters vs early majority
- the “chasm” between visionary users and pragmatic buyers
- beachhead strategies