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Mental models are a way of explaining how things work. Throughout our lives, we build up a personal collection of mental models to understand the world around us.

Mental models aren't perfect but developing a rich toolbox of them can be useful in navigating the complexities of life. Learning to intuitively apply the right models in the right situations is something we develop with practice.

This website is a curated collection of models with broad applicability in everyday life. There’s a focus on brief descriptions and simple, real life examples of the models in use.


Weekly Mental Model

Pareto Principle

For many scenarios, 80% of the effects stem from 20% of the causes. This is often referred to as the 80/20 rule.

Description

In 1896, economist Vilfredo Pareto found that 20% of the population in Italy owned 80% of the land. This ratio is commonly cited in wealth distribution (the richest 20% owns the majority of the world's income) and in business management (80% of sales come from 20% of clients). Another application is managing workload--by prioritizing the 20% most important work, we can (at times) gain 80% of the value. Note that while the Pareto principle can be a useful construct in many situations, it's not applicable everywhere. See also: Power Law.

Examples

  • Microsoft once noted that fixing the top 20% of reported bugs would solve 80% of issues and crashes in a system.

  • Many companies find that majority of revenue comes from a small portion of the product. For example, video rental shops in 1988 found that 80% of revenue came from 20% of the titles.