How To Think About Mental Models?

On mental models and how they shaped my thinking.

What is a Mental Model?

I first came across the idea of a Mental Model on the Farnam Street Blog. Here is how they described a mental model in this blog post¹,

A mental model is a simplified explanation of how something works. Any idea, belief, or concept can be boiled down to its essence. Like a map, mental models highlight key information while ignoring irrelevant details. They’re tools for compressing complexity into manageable chunks.

I did some more research and found that a Scottish psychologist by the name of Kenneth Craik published a book in 1943 titled, The Nature of Explanation² where he wrote that the mind constructs "small-scale models of reality that it uses to reason, to anticipate events and to underlie explanation”. This was one of the earliest known definitions of mental models as a concept.

I continued my exploration. I then came across the website of James Clear, the author of Atomic Habits (2018) who extended my understanding of a mental model by using some simple examples in this blog post³,

The phrase “mental model” is an overarching term for any sort of concept, framework, or worldview that you carry around in your mind. Mental models help you understand life. For example, supply and demand is a mental model that helps you understand how the economy works. Game theory is a mental model that helps you understand how relationships and trust work. Entropy is a mental model that helps you understand how disorder and decay work.

The Decision Lab Team, an applied research and innovation firm, wrote about how mental models emerge from past experiences and help us process future events in this blogpost⁴

Mental models refer to the internal representations of external reality that individuals use to understand, interpret, and navigate the world around them…Mental models are constructed by individuals based on their unique existing beliefs, perceptions, and understandings of the world. That is, mental models are born out of prior experience and can influence our expectations about how things will function in the future.

A group of researchers whose names were Natalie Jones, Helen Ross, Tim Lynam and Pascal Perez published an article in the Ecology and Society journal in March 2011 where they provided an interdisciplinary synthesis of the literature that has contributed to the theoretical development and practical application of the mental model construct. They described the utility of a mental model as follows⁵

Mental models are personal, internal representations of external reality that people use to interact with the world around them. They are constructed by individuals based on their unique life experiences, perceptions, and understandings of the world. Mental models are used to reason and make decisions and can be the basis of individual behaviors. They provide the mechanism through which new information is filtered and stored.

The team from Coursera, a massive open online course provider published an excellent article on their website about the different types of mental models and how they can be used differently based on your background and the context you are in as an inidvidual⁶

Everyone uses mental models. Yet, every individual does so differently. Here are some examples of when you take a walk along a beach, you’ll view it differently depending on your model: A biologist might focus on the birds. An environmentalist might look for evidence of the impact of climate change. An engineer could seek signs of erosion. A business person might want to predict the value of the land. Artists might seek a view they want to capture in paints or a photograph. You could go to that beach and look at it with several mental models at once. That’s where the different types of mental models come into play.

I then finally asked ChatGPT to give me the best definition of a mental model in one brief paragraph after reviewing all the articles published on this concept on the internet. Here is what ChatGPT shared with me,

A mental model is a deeply held internal representation of how the world works, shaped by our experiences, knowledge, and assumptions. It helps us simplify complexity, make decisions, and predict outcomes by providing a framework for interpreting information. Though not always accurate, mental models guide our thinking and behavior, and refining them can significantly improve problem-solving, learning, and decision-making across all areas of life.

Humans and Mental Models

Ah. These humans.

Always trying to simplify things in their environment.

The Cave People, The Leaders, The Industrialists, The Artists, The Scientists, The Programmers, The Mothers, The Teachers…

All trying to make sense of the world using their own mental models.

It is such a basic human trait.

We also use mental models in daily conversations. How you may ask?

What are the first questions you ask someone when you meet them for the first time?

Where do you do for a living? Are you married? What are some of your hobbies? How old are you? Where did you grow up? What did you study at university? Where do you stay? How many siblings do you have?

Why do we ask these specific questions and not other questions?

Well we do ask other questions in the second or fifth or tenth meeting.

Are you political? What is your political belief? Are you religious? What is your religious belief? What is your sexual identity? What is your astrological sign? What is your favourite book? What is your favourite film? What did your parents do professionally?

And then we become friends and lovers. The questions change. But still have a pattern right?

What did you eat today morning? How many hours did you sleep? Did you get some sunlight or exercise in today? How was your commute to work today? How was your commute back home from work today? How much do you earn a month? How much do you save? What are your thoughts on raising a family? What kind of home do you want to live in? How many vacations would you like to go on each year? Tell me a secret you have not shared with anyone yet?

Does this ever stop.

No.

This quest to collect and organize information from our environment and relationships. It is a basic human trait.

This goes on forever.

In our daily conversations.

In our homes.

In our workplaces.

In our dreams.

We are constantly trying to make sense of the world around us.

We are constantly trying to create an internal representation of how the external world works.

We are constantly trying to create a mental model about the world around us.

Still don’t believe me? Try this.

What are the core beliefs, thoughts, ideas and assumptions that come to your mind when I say your name.

Take a few seconds…

Those are your mental models.

So many definitions and so many thoughts. Can you just create a mental model about mental models?

Fine.

I am sold on this concept of using mental models in a more constructive way in my life. But it is a lot of information.

Simplify it.

Create a simple definition for me.

Okay.

Here is a combined definition I created for a Mental Model after reviewing, studying and analyzing the above sources and talking to thousands of other humans through my lifetime,

A Mental Model is a simplified explanation of how something works. Like a map, mental models highlight key information while ignoring irrelevant details. They’re tools for compressing complexity into manageable chunks. It is an overarching term for any sort of concept, framework, or worldview that you carry around in your mind. It helps us make decisions, and predict outcomes by providing a framework for interpreting information. Mental models are born out of prior experience and can influence our expectations about how things will function in the future. They are the core beliefs, thoughts, ideas and assumptions that define your life as an individual. A mental model is a deeply held internal representation of how the world works, shaped by our experiences, knowledge, and assumptions.

How to use Mental Models in your Life?

I realized there were mental models for Science, Business, Technology, General Thinking Tools, Physics, Chemistry, and Biology, Systems, Numeracy, Microeconomics, Military and War and Human Nature and Judgment.

I then spent the next few months studying about the different types of mental models in all these fields.

I wanted to find ten mental models that could help me become a better thinker.

After months of research, I made a list of ten mental models that would guide my thinking going ahead.

This included,

• Mental Model 1 – First Principles Thinking

• Mental Model 2 – The Scientific Method

• Mental Model 3 – Correlation vs Causation

• Mental Model 4 – Paradox of Choice

• Mental Model 5 – Opportunity Cost

• Mental Model 6 – Compounding

• Mental Model 7 - Delta 4 Theory

• Mental Model 8 - Self Determination Theory

• Mental Model 9 - Hierarchy of Needs

• Mental Model 10 - Intersectionality

Breaking down Mental Models

In the rest of this essay I will share a definition about each of the above mental models.

I will then add some notes about how this model helped me become a better thinker, helped me understand the world or helped me solve a relevant real world problem.

I will also share a link to a video or audio resource about the mental model.

Mental Model 1 - First Principles Thinking

​First principles thinking is a problem-solving approach that involves breaking down complex issues into their most fundamental truths and reasoning up from there, rather than relying on assumptions or analogies. This method encourages questioning existing beliefs and reconstructing solutions based on foundational facts, fostering innovation and original thinking.

The reason I did not enjoy science at school was because I never learned how to reason from first principles. I hated chemistry at school. As an adult, I learned about the periodic table of elements and then began my life long exploration and love for this beautiful subject. Here is a short clip from Innomind of a video interview between Kevin Rose and Elon Musk where they discuss this mental model with examples.

Mental Model 2 - Scientific Method

​The Scientific Method is a systematic approach to acquiring knowledge through observation, hypothesis formulation, experimentation, and analysis. It begins with observing phenomena and posing questions, followed by developing testable hypotheses. Experiments are then conducted to test these hypotheses, and the results are analyzed to draw conclusions. This iterative process allows scientists to refine theories and expand understanding, ensuring that conclusions are based on empirical evidence and logical reasoning.

Some of the most important scientific discoveries include the structure of DNA, electricity, penicillin, and the periodic table, impacting various fields like genetics, technology, medicine, and chemistry. Scientists have used the scientific method as an important thinking tool to make these discoveries over several years. Here is a video from Khan Academy explaining this mental model with examples.

Mental Model 3 - Correlation vs Causation

Correlation refers to a statistical association between two variables, where changes in one variable are related to changes in another. However, correlation does not imply causation—just because two variables move together does not mean that one causes the other. Causation implies a direct cause-and-effect relationship, where one variable actively influences the other.Mistaking correlation for causation can lead to false conclusions, which is why it’s crucial in research and analysis to identify underlying mechanisms or conduct controlled studies to establish true causality.

A simple example to illustrate the difference between correlation and causation is that ice cream sales and violent crime rates often increase together, but this doesn't mean ice cream causes crime. This is a correlation, not a causal relationship. Causation means action A causes outcome B. Smoking causes lung cancer. This is a scientific and evidence backed claim. This is a casual relationship. Here is a video from the Winton Center explaining this mental model with examples.

Mental Model 4 - Paradox of Choice

The Paradox of Choice, introduced by psychologist Barry Schwartz, posits that while having options is generally associated with freedom and satisfaction, an overabundance of choices can lead to negative psychological effects⁷. In modern society, the proliferation of options in areas ranging from consumer goods to life decisions can overwhelm individuals, leading to decision paralysis, increased anxiety, and diminished satisfaction with the choices made. This phenomenon suggests that beyond a certain point, more choices do not equate to greater happiness but can instead contribute to stress and regret.

I struggled to choose a career until I stumbled upon this video and the research of Barry Schwartz. I then realized that there will always be careers that peak my interest. However I will never grow professionally if I do not choose one career, acquire skills and knowledge in the same and practice it professionally. This is what led me to become a classroom teacher and choose Education as my area of expertise. I did not want to get overwhelmed by the paradox of choice. Here is a TED talk by Barry Schwartz explaining this mental model with some examples.

Mental Model 5 - Opportunity Cost

​Opportunity Cost refers to the value of the next best alternative that must be forgone when making a decision. It encompasses both explicit costs, such as money spent, and implicit costs, like time or satisfaction lost. This concept is fundamental in economics, highlighting the trade-offs involved in every choice. For instance, if you spend time and money attending a concert, the opportunity cost includes the enjoyment and potential earnings you sacrificed by not engaging in other activities during that time.​

This mental model helped me change my relationship with time. I realized that increasing time at the office takes away time to rest at home and spend time with my family after work. The opportunity cost of working longer was poor health and poor relationships. I apply this concept to personal and professional situations and do not just use it in an economic or business context. Remember that because your time is valuable any decision you make has a cost. Here is a video from the Marginal Revolution University explaining this mental model with examples.

Mental Model 6 - Compounding

Compounding is the process where the earnings from an investment—such as interest or dividends—are reinvested to generate additional earnings over time. This cycle of earning returns on both the initial principal and the accumulated interest leads to exponential growth, making it a powerful tool for wealth creation. The longer the investment period and the more frequent the compounding intervals, the greater the potential for significant financial growth.​

Compounding helped me change my relationship to money. Let me share an example of how this concept works. I invest $100 at a 10% compound interest rate in year 1 and end the year with $110 in my account. I then invest $110 in year 2 at a 10% compound interest rate and end the year with $121.1 in my account. If I keep doing this for 10 years at a 10% compound interest rate then I will end up with $259.37 by year 10. This is the power of compounding where your money and wealth will grow over time if invested in a strategic manner. Here is a video from One Minute Economics explaining this mental model with some examples.

Mental Model 7 - Delta 4 Theory

The Delta 4 Theory, introduced by entrepreneur Kunal Shah, posits that a product or service must deliver a minimum improvement of four points in efficiency—on a scale from 1 to 10—over existing solutions to achieve significant market success and wealth creation. Such a substantial enhancement leads to irreversible shifts in consumer behavior, where users are unlikely to revert to previous methods. These offerings often benefit from a "Unique Bragworthy Proposition" (UBP), where users enthusiastically share their experiences, fostering organic growth without heavy marketing.

Kunal used this concept to build companies that solved some Delta 4 problems like Freecharge and CRED. I am trying to use the same framework to build something that solves the problem of library access in large cities and the problem of archiving your podcast experience on the Internet. Companies that demonstrate a significant "Delta 4" compared to their competition are considered more promising. Examples include Airbnb, Uber, and Dropbox. Here is a talk by Kunal Shah explaining this mental model with some examples.

Mental Model 8 - Hierarchy of Needs

Maslow's Hierarchy of Needs is a psychological theory proposed by Abraham Maslow in 1943⁸, outlining a five-tier model of human motivation. Depicted as a pyramid, it starts with basic physiological needs like food and shelter, followed by safety needs, love and belonging, esteem, and culminating in self-actualization—the realization of one's full potential. According to Maslow, individuals must satisfy lower-level needs before progressing to higher-level growth needs. While the theory has been influential in psychology, education, and business, it has faced criticism for its rigidity and lack of empirical support. Nevertheless, it remains a significant framework for understanding human motivation and development.

The hierarchy of needs matters because it helps us understand what motivates people—starting from basic survival (like food and safety) to higher goals (like self-esteem and purpose). When lower needs aren’t met, it’s hard to focus on growth or creativity. This framework is useful in education, work, and personal life to support people at the right level and help them thrive. Here is a video from School of Life explaining this mental model with some examples.

Mental Model 9 - Self Determination Theory

​Self-Determination Theory (SDT), developed by psychologists Edward Deci and Richard Ryan, is a comprehensive framework for understanding human motivation and personality⁹. It posits that individuals have three innate psychological needs—autonomy (the desire to be the agent of one's own actions), competence (the need to master tasks and learn different skills), and relatedness (the need to feel connected to others)—which, when satisfied, foster intrinsic motivation, well-being, and personal growth. SDT emphasizes that when these needs are supported, individuals are more likely to engage in activities willingly and with a sense of volition, leading to enhanced performance and psychological health. Conversely, when these needs are thwarted, motivation and well-being can deteriorate. This theory has been applied across various domains, including education, work, healthcare, and sports, to promote environments that support self-motivation and psychological wellness.

Self-Determination Theory matters because it explains what truly drives people to grow, learn, and succeed—not rewards or pressure, but feeling autonomous, competent, and connected to others. When these needs are met, motivation becomes more natural and lasting, leading to better performance, well-being, and fulfillment in all areas of life. Here is a video by Edward Deci explaining this mental model with some examples.

Mental Model 10 - Intersectionality

Intersectionality is a framework developed by legal scholar Kimberlé Crenshaw in 1989 to describe how overlapping social identities—such as race, gender, class, sexuality, and disability—interact to create unique experiences of oppression or privilege¹⁰. Rather than viewing forms of discrimination in isolation, intersectionality emphasizes that these identities are interconnected and can compound, leading to distinct challenges for individuals, particularly those from marginalized groups.

Intersectionality matters because it helps us understand how different aspects of a person’s identity—like race, gender, class, and ability—interact to shape their experiences, especially with inequality and discrimination. It shows that people don’t face just one kind of challenge, and recognizing these layers leads to more fair, inclusive, and effective solutions. Here is a TED talk by Kimberle Crenshaw explaining this mental model with some examples.

Mental Models have several other names like framework, schema, perspective, viewpoint, understanding, cognitive model, internal model, or working model.

However the basic idea is the same.

To organize and understand human experience in all its complexity.

I will conclude this article on a pessimistic note with the words of one of my favourite thinkers,

“Without models from multiple disciplines, you will fail in business and in life.”

– Charlie Munger.

If you would like to learn more about these mental models you can explore some of the resources linked below, follow the notes/links or read more in this guide.

Until next time,

Keep Learning!

Abhishek

Resources

1. Farnam Street Mental Model Glossary

2. James Clear Mental Model List

3. Junto Investments Mental Model List

4. Ness Labs Mental Model List

5. Mental Model Wikipedia Article

Notes/Links

1. Farnam Street. (n.d.). Mental Models: The Best Way to Make Intelligent Decisions (~100 Models Explained). Retrieved on April 22, 2025, from https://fs.blog/mental-models/.

2. Interaction Design Foundation - IxDF. (2015, July 5). Mental models. Interaction Design Foundation - IxDF. https://www.interaction-design.org/literature/book/the-glossary-of-human-computer-interaction/mental-models.

3. Clear, J. (n.d.). Mental Models: Learn How to Think Better and Gain a Mental Edge. Retrieved on April 22, 2025, from https://jamesclear.com/mental-models.

4. Decision Lab. (n.d.). Mental Models. Retrieved on April 22, 2025, from https://thedecisionlab.com/reference-guide/design/mental-models.

5. Jones, N & Ross, H & Lynam, T & Perez, P & Leitch, A. (2011). Mental Models: An Interdisciplinary Synthesis of Theory and Methods. Ecology and Society. 16. 10.5751/ES-03802-160146. Retrieved on April 22, 2025, from https://www.researchgate.net/publication/259117133_Mental_Models_An_Interdisciplinary_Synthesis_of_Theory_and_Methods.

6. Coursera Staff. (2024). Mental Model: What Is It? (+Common Examples). Retrieved on April 22, 2025, from https://www.coursera.org/articles/mental-model.

7. Decision Lab. (n.d.). Paradox of Choice. Retrieved on April 22, 2025, from https://thedecisionlab.com/reference-guide/economics/the-paradox-of-choice.

8. Mcleod. S. (2025). Maslow’s Hierarchy of Needs. Retrieved on April 22, 2025, from https://www.simplypsychology.org/maslow.html#:~:text=From%20the%20bottom%20of%20the,esteem%2C%20and%20self%2Dactualization.

9. Ackerman.C. & Neuhaus.M. (2018). Self Determination Theory and How It Explains Motivation. Retrieved on April 22, 2025, from https://positivepsychology.com/self-determination-theory/.

10. Samie. A. (2025). Intersectionality as a Social Theory for Encyclopedia Brittanica. Retrieved on April 22, 2025, from https://www.britannica.com/topic/intersectionality?utm_source=chatgpt.com.