Incentives Lab — Core Models
92 terms across 10 themes — every definition in the Atlas sourced from this manual, with executive examples and counter-moves.
How will I feel about this in 10 minutes / 10 months / 10 years?
Systems that gain from disorder.
Combine extreme safety with extreme risk; avoid the middle.
Posterior = (likelihood × prior) / evidence.
Start with a prior; update with new evidence.
Approach a situation as if you knew nothing.
High-impact, hard-to-predict, retrospectively explainable events.
Adding people to a late project makes it later.
Don't remove something until you understand why it was put there.
Know the perimeter of what you actually know.
With clear property rights and low transaction costs, parties negotiate to efficient outcomes.
Working memory has limits.
Specialize in what you give up the least to do.
Small advantages, applied consistently, become uncatchable.
Convex payoffs gain more than they lose; concave do the opposite.
Software architecture mirrors org structure.
Working together has a cost that scales with the number of people.
The gap between early adopters and the early majority kills most products.
A designated dissenter in any major decision.
Innovators → early adopters → early majority → late majority → laggards.
Each additional unit produces less marginal benefit.
Low-end or new-market entrants overtake established incumbents.
Urgent vs. important; act, schedule, delegate, delete.
Important-but-not-urgent is where strategic leverage lives.
Average outcomes across the population differ from outcomes across time for one person.
Decisions optimize utility, not value.
Probability × payoff, summed across outcomes.
Decompose a problem into estimable parts; multiply through.
Break a problem down to irreducible truths and rebuild from there.
Self-reinforcing loops of momentum.
Decisions depend on what other strategic actors will do.
Don't attribute to malice what's explainable by incompetence — or incentives.
Intersection of what you're best at, passionate about, and economically viable in.
Hedgehogs know one big thing; foxes know many small things.
Decision time grows with the number of choices.
Doing everything right by current customers can kill you.
Solve forward by asking how to fail.
Customers hire products to do a job in their life.
Bet size optimized to maximize long-run growth without ruin.
A diverse set of models from many disciplines, used together.
The longer an idea has survived, the longer it likely will.
The best place nearby vs. the best place overall.
Aggregating many niche markets equals or exceeds the mainstream.
How outcomes are weighted in the decision calculus.
Models are simplifications — never the thing itself.
Build buffers so small mistakes don't become fatal.
Decisions hinge on the next unit, not on the average.
Always have a working model of what your counterpart believes.
We want what others want.
Choose the option whose worst-case regret is least bad.
A state where no player benefits from changing strategy unilaterally.
Value grows with the number of users.
Prefer the simplest explanation consistent with the evidence.
Ambitious objectives paired with measurable key results.
Observe, Orient, Decide, Act — faster than your competitor.
The value of the next-best thing you could have done.
Investments that give you future choices.
Most outcomes come from a few causes.
Where you can go is constrained by where you've been.
A small number of items account for most of the value.
Imagine the project failed; explain why.
Imagine the failure beforehand; investigate it afterward.
Individual rationality produces collective irrationality.
Reason in distributions, not in points.
Adversarial review by an internal opposition.
Beliefs about reality shape the reality.
Choose the option you'll regret least at 80.
Two-way doors vs. one-way doors.
Extreme results tend to be followed by less extreme ones.
Risk has known probabilities. Uncertainty doesn't.
Technologies grow slowly, then explode, then plateau.
The default coordination outcome people converge on without communicating.
Ask 'and then what?' — twice.
Your sample isn't random.
Single-loop fixes errors; double-loop questions the assumptions producing them.
Decision-makers should bear the consequences of their decisions.
Much of human behavior is positioning for status.
Restate the opposing view at its strongest before responding.
Causal chain from inputs to outputs to outcomes to impact.
Looking where the light is, not where the keys are.
Have a thesis. Update it on evidence.
Past investment is irrelevant to future decisions.
What does it cost to leave?
Behavior emerges from structure, not from individuals.
Modeling what others think, want, and will do.
Start cooperative; copy your counterpart's last move thereafter.
Shared resources get over-consumed by individual rational actors.
Teams small enough to be fed by two pizzas.
False positives vs. false negatives.
Design rules without knowing where you'll land under them.
Where, how, what — in that order.
Start from the customer outcome and reason backward to today.