Decision-making

14 ideas across the corpus

The models for making better choices under real constraints — time, risk and incomplete information.

Every hard choice is made with too little information and too little time. These are the thinking tools that help you decide well anyway — from inverting the problem and weighing opportunity cost to reasoning about expected value and staying inside your circle of competence. Together they turn gut calls into a repeatable process.

Key ideas here: Second-order thinking, Inversion, Opportunity cost, Expected value, Margin of safety — and 9 more below.

Mental models

Mental model

Second-order thinking

Second-order thinking is considering not just the immediate result of a decision but the consequences of those consequences — the “and then what?”…

Mental model

Inversion

Inversion is solving a problem from the opposite end — asking how to fail, then avoiding that. Instead of “how do I succeed?”, you ask “what would…

Mental model

Opportunity cost

Opportunity cost is the value of the best alternative you give up when you make a choice. The true cost of anything isn’t just its price — it’s…

Mental model

Expected value

Expected value is the average outcome of a decision if you could repeat it many times — each possible result weighted by its probability. It tells you…

Mental model

Margin of safety

Margin of safety is building a buffer between what you expect and what you can withstand — so that errors, bad luck, or wrong assumptions don’t cause…

Mental model

Optionality

Optionality is having choices with limited downside and large potential upside — keeping options open so you can benefit from good outcomes while…

Mental model

The Eisenhower matrix

The Eisenhower matrix sorts tasks on two axes — urgent vs important — into four boxes: do now (urgent + important), schedule (important, not urgent),…

Mental model

The OODA loop

The OODA loop is a decision cycle — Observe, Orient, Decide, Act — repeated continuously. In a contest, whoever runs the loop faster and orients more…

Mental model

Marginal thinking

Marginal thinking is making decisions based on the next additional unit — the extra cost and extra benefit of one more — rather than on totals or…

Mental model

Circle of competence

Your circle of competence is the set of areas where you genuinely have expertise. The model says: know its boundary, operate inside it, and be honest…

Mental model