Farnam Street
Mastering the best of what other people have already figured out
Charles Lutwidge Dodgson (1832-1898), better known by his pseudonym Lewis Carroll, was not only an author but a keen observer of human nature. His most famous works are Alice’s Adventures in …
The Feynman Technique is the most effective method to unlock your potential, develop deep understanding, and quickly learn any subject. Richard Feynman was not only a Nobel laureate in Physics but …
The prisoners’ dilemma is the best known strategy game in social science. The game shows why two entities might not cooperate even when it appears in their best (rational) interest to do so. …
Welcome to the conjunctive and disjunctive events bias. Why are we so optimistic in our estimation of a projects cost and schedule? Why are we so surprised when something inevitably goes wrong? …
Feedback loops are created when reactions affect themselves and can be positive or negative. Consider a thermostat regulating room temperature. This is an example of a negative feedback loop. As the …
The Kantian Fairness Tendency refers to the pursuit of perfect fairness which causes a lot of terrible problems. Stop expecting the world to be fair and adjust your behavior accordingly. To learn …
What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others. — Aristotle The rules pay you to do the wrong …
There are 3 things you should know about the availability heuristic: We often misjudge the frequency and magnitude of events that have happened recently. This happens, in part, because of the …
“The reliability that matters is not the simple reliability of one component of a system, but the final reliability of the total control system.” — Garrett Hardin *** We learn from …
Other things being equal when the price of a good rises, the quantity demanded should fall. Economics refer to this as the law of demand. Because there are many counter-examples to this law it’s …
Whenever coins containing precious metals have been used along with base metal coins of the same denomination, both legally accepted as tender, the bad coins have driven the good coins out of …
The scientific method refers to a process of thought based on integrating previous knowledge, observing, measuring, and logical reasoning. In this short video taken from his lectures, Physicist …
“Where all think alike, no one thinks very much.” — Walter Lippmann “The five most dangerous words in business are: ‘Everybody else is doing it.'” — Warren Buffett *** …
We often pay attention to irrelevant information when making decisions. One way this can play out is in the form of ‘anchoring.’ When we make an estimate, we can end up using irrelevant information as …
In economics, comparative advantage refers to the ability of a person or nation to produce a good or service at a lower opportunity cost than another person (or nation). This is why trade can create …
Hindsight bias occurs when we look backward in time and see events are more predictable than they were at the time a decision was made. This bias, also known as the “knew-it-all-along …