Sunday, April 28, 2013

Monday, April 15, 2013

Quite a Commencement Speech





 If you find yourself in such a place, I would ask you to consider a rule I learned as a physician: First, do no harm.

Besides, life is not that short. Life is well and long enough for you to come to regret any activity or habit
involving an exchange of long-term risk for short-term benefit. This is what many if not most Americans
did during the refinancing and consumption boom of the last decade, and it was what our government did
in egging on the boom. This is also the gospel of drunk drivers and cheating spouses.

Of course, when you encounter the opposite—the short-term risk exchanged for long-term benefit—
consider hitting that button again and again and again.

Past may be prologue, but this is not true for the individual. The individual can think different

Monday, April 08, 2013

The Latticework of Mental Models


Psychology (misjudgments)
Biases emanating from the Availability Heuristic:
1. Ease of Recall
2. Retrievability
Biases emanating from the Representativeness Heuristic
3. Bias from insensitivity to base rates
4. Bias from insensitivity to sample size
5. Misconceptions of chance
6. Regression to the mean
7. Bias from conjunction fallacy
Biases emanating from the Confirmation Heuristic
8. Confirmation bias
9. Bias from anchoring
10. Conjunctive and disjunctive-events bias
11. Bias from over-confidence
12. Hindsight Bias
Others
13. Bias from incentives and reinforcement
14. Bias from self-interest — self deception and denial to reduce pain or increase pleasure; regret avoidance.
15. Bias from association
16. Bias from liking/loving
17. Bias from disliking/hating
18. Commitment and Consistency Bias
19. Bias from excessive fairness
20. Bias from envy and jealousy
21. Reciprocation bias
22. Over-influence from authority
23. Tendency to super-react to deprival; strong reacting when something we have or almost have is (or threatens to be) taken away. Loss aversion?
24. Bias from contrast
25. Bias from stress-influence (introduction | posts)
26. Bias from emotional arousal
27. Bias from physical or psychological pain
28. Bias from mis-reading people; character
29. Attribution Error; underestimating situation factors (including roles) when explaining reasons; one to one versus one to many relationships
30. Bias from the status quo
31. Do something tendency
32. Do nothing tendency
33. Over-influence from precision/models
34. Simplicity Bias
35. Uncertainty avoidance
36. Ideological bias
37. Not invented here bias — thinking that our own ideas are the best ones
38. Bias from over-weighting the short-term
39. Tendency to avoid extremes
40. Tendency to solve problems using only the field we know best / favored ideas. (Man with a hammer.)
41. Bias from social proof
42. Over-influence from framing effects
43. Lollapalooza
Other Mental Models:
- Asymmetric Information
Occam’s Razor
Deduction and Induction
Basic Decision Making Process
Scientific Method
- Process versus Outcome
- And then what?
- The Agency Problem
- 7 Deadly Sins
- Network Effect
Gresham’s Law 
The Red Queen Effect
Business
- Ability to raise prices
- Scale
- Distribution
- Cost
- Brand
- Improving returns
- Porters 5 forces
- Decision trees
- Diminishing Returns
Investing
- Mr. Market
- Margin of Safety
- Circle of competence
Ecology
- Complex adaptive systems
- Systems Thinking
Economics
- Utility
- Diminishing Utility
Supply and Demand
Scarcity
- Opportunity Cost
- Marginal Cost
Comparative Advantage
- Trade-offs
- Price Discrimination
- Positive and Negative Externalities
- Sunk Costs
- Moral Hazard
Game Theory
Prisoners’ Dilemma
Tragedy of the Commons 
- Bottlenecks
- Time value of Money
Engineering
Feedback loops
Redundancy
- Tight coupling
- Breakpoints
Mathematics
Bayes Theorem
- Power Law
- Law of large numbers
- Compounding
- Permutations
- Combinations
- Variability
- Trend
- Inversion
Statistics
- Outliers and self fulfilling prophecy
- Correlation versus Causation
- Mean, Median, Mode
- Distribution
Chemistry
- Thermodynamics
- Kinetics
- Autocatalytic reactions
Physics
- Newton’s Laws
- Momentum
- Quantum Mechanics
Critical Mass
Equilibrium
Biology
- Evolution

Saturday, April 06, 2013

What I tell my Daughter when she cries



Hold on, to me as we go
As we roll down this unfamiliar road
And although this wave (wave) is stringing us along
Just know you're not alone
Cause I'm gonna make this place your home

Settle down, it'll all be clear
Don't pay no mind to the demons
They fill you with fear
The trouble it might drag you down
If you get lost, you can always be found

Just know you're not alone
Cause I'm gonna make this place your home

Friday, April 05, 2013

DFW on Certainty


Part of our emergency is that it's so tempting to do this sort of thing now, to retreat to narrow arrogance, pre-formed positions, rigid filters, the “moral clarity” of the immature.

The alternative is dealing with massive, high-entropy amounts of info and ambiguity and conflict and flux; it’s continually discovering new areas of personal ignorance and delusion. In sum, to really try to be informed and literate today is to feel stupid nearly all the time and to need help.

That's about as clearly as I can put it ... That last one's of especial value, I think. As exquisite verbal art, yes, but also as a model for what free, informed adulthood might look like in the context of Total Noise: not just the intelligence to discern one's own error or stupidity, but the humility to address it, absorb it, and move on and out therefrom, bravely, toward the next revealed error.

This is probably the sincerest, most biased account of “best” your decider can give: these pieces are models — not templates, but models — of ways I wish I could think and live in what seems to me this world.
— David Foster Wallace