Combinations and permutations are very
important in calculating probabilities. In this text, we will not go
into probabilities at all. We will also try to live without any
mathematical formulas. The idea is to focus on the combinations and
permutations of the mental models. Lets start with definitions.

**Definitions**

Combinations can
be defined in many ways. Here is one: ”A joining or merging of
different parts or qualities in which the component elements are
individually distinct.”

Permutations can
be defined in many ways. Here is one: ”Each of a several ways in
which a set of number of things can be ordered or arranged.” In
mathematics, the notion of permutation relates to the act of
arranging all the members of the set into some sequence or order.

**Combinations of the mental models**

We need to forget
mathematical meanings when we are talking about combinations of the
mental models. We could also talk about multiplications when all the
mental models are working towards the same direction. For example,
when we talk about brands, we talk about many psychological
tendencies/biases moving to the same direction. Many biases like
social proof, availability bias, authority bias, etc. together are
creating a connection between the product and customer´s mind. A
strong need to buy a particular brand is the product of the biases.
The strength of each bias is different in the minds of different
customers. In reality, mental models never have effects only on one
direction. For example, social proof from a person a customer hates
moves his/her decision to a negative direction and from a person
he/she likes moves to a positive direction. Sometimes different
models will lead people into separate directions.

**Permutations and mental models**

The biggest
difference between combinations and permutations of the mental models
is that in permutations the order of the mental models matter. This
means less choices. Without a right order, it is not possible to get
the wanted results. For example, we cannot introduce new habits
without the right order. Habits have three components.
First is trigger, which offers us a clue to execute an action. Then,
there is the action. The reaction for the action is a reward. Reward
is really a source of motivation. When we want to establish a new
habit, we need to have all the components in the right order. There
is no action without the reward or clue. The most important things in
establishing a new habit is that the source of motivation is very
rewarding. The action should be as achievable or easy as possible at
first. A trigger should be as available as possible.

**Lollapalooza-effect is one kind of combinations of mental models**

When the most
mental models such as, psychological biases, Inertia, the path of least resistance, and so on, and their strongest effects leads us to
the same direction, we can talk about

**Lollapalooza-effect.****This mental model is invented by Charlie Munger. He only talks about everything moving to the same direction, but it is basically the same thing as having big effects compared to small effects. Munger uses a simplified model. That is maybe a better approach than mine. All the billion dollar brands, the most successful companies and people are the results of the Lollapalooza-effects. We will get to these things later. For example, I will show how Apple and its products can be understood better through mental models.**
We have just
scratched a surface as always. All these models are a little bit
simplified, because reality is too complex to understand. I hope we
are a little bit wiser after these text.

Have a nice week!

Poor Charlie´s Almanack, Peter Kaufmann, Charles T. Munger

The Power of Habit, Charles Duhigg

Poor Charlie´s Almanack, Peter Kaufmann, Charles T. Munger

The Power of Habit, Charles Duhigg

-TT

## No comments:

## Post a Comment