Mental Model: Reciprocation

Mental Model: Reciprocation

Reciprocation is one of the most powerful social forces that shape human behavior. It is a fundamental principle that influences how we interact with others, make decisions, and even fall prey to persuasion tactics. Understanding the psychology behind reciprocation can help us navigate our personal and professional relationships more effectively. In this blog, we will…

Mental Model: Incentive-caused Bias

Mental Model: Incentive-caused Bias

Have you ever wondered why some people, even the most well-intentioned ones, make decisions that seem biased or irrational? One of the key reasons is a cognitive bias known as incentive-caused bias. This psychological phenomenon influences decision-making in a way that aligns with personal incentives rather than objectivity or ethical considerations. In this blog, we…

Mental Model: Association Bias

Mental Model: Association Bias

The human brain is wired to recognize patterns and make connections between concepts, people, and experiences. This ability helps us navigate daily life efficiently. However, sometimes, these connections are misleading or based on superficial associations rather than factual evidence. This is where association bias comes into play. Association bias is a cognitive bias that causes…

Mental Model: Liking

Mental Model: Liking

The way we perceive and interact with people is often influenced by subconscious biases, and one of the most powerful among them is the Liking. This psychological principle suggests that we are more likely to agree with, trust, and be influenced by people we like, often without objectively evaluating their arguments or intentions. While liking…

Mental Model: Lollapalooza Effect

Mental Model: Lollapalooza Effect

The human mind is a complex mechanism, prone to errors and distortions due to inherent cognitive biases. One of the most fascinating psychological concepts that explain how multiple biases interact and amplify one another is the Lollapalooza Effect. Coined by legendary investor Charlie Munger, this term describes a scenario where multiple psychological tendencies act in…

Book Summary: The Richest Man in Babylon

George S. Clason’s The Richest Man in Babylon is a timeless financial guide that presents wealth-building principles through parables set in ancient Babylon. Originally published as a series of pamphlets in the 1920s, the book has since become a classic in personal finance. It provides practical wisdom on saving, investing, and managing money effectively, all…

Book Summary: Nudge

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein explores the concept of “choice architecture” and how small design changes (nudges) can help people make better decisions without restricting their freedom. The book is based on behavioral economics and psychology, showing how humans often make irrational choices due to cognitive…