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Mental Models

Apply Charlie Munger's "latticework" approach — a small set of cross-disciplinary thinking tools (inversion, second-order effects, incentives, circle of competence, opportunity cost, base rates) to frame a vague or general problem.

Use when: the user brings a fuzzy problem that hasn't been broken down yet, asks "how should I think about this," seems to be reasoning from a single framework when the problem is really cross-disciplinary, or seems stuck circling the same angle repeatedly. This is the default general-purpose skill when no more specific skill (decision-memo, premortem, first-principles) obviously fits better.

Install this skill

  1. Create a folder named `mental-models`.
  2. Save the skill content below as `SKILL.md` inside that folder.
  3. Place the folder in `~/.codex/skills/` for Codex, `.cursor/skills/` for Cursor or `.claude/skills/` for Claude Code.
  4. Describe the task normally. Your agent loads the skill when its description matches.
mental-models/SKILL.md
---
name: mental-models
description: Apply Charlie Munger's "latticework" approach — a small set of cross-disciplinary thinking tools (inversion, second-order effects, incentives, circle of competence, opportunity cost, base rates) to frame a vague or general problem. Use this whenever the user brings a fuzzy problem that hasn't been broken down yet, asks "how should I think about this," seems to be reasoning from a single framework when the problem is really cross-disciplinary, or seems stuck circling the same angle repeatedly. This is the default general-purpose skill when no more specific skill (decision-memo, premortem, first-principles) obviously fits better.
---

# Mental Models

Most bad reasoning isn't a lack of intelligence — it's using one lens on a
problem that needs several. This skill applies a short list of
cross-disciplinary tools to reframe a fuzzy problem before diving into
solving it. Don't run through the whole list mechanically — pick the 1-3
tools that actually bite for this problem.

## The tools

**Inversion.** Instead of asking "how do I succeed," ask "what would
guarantee failure, and am I doing any of that?" Working backward from
failure surfaces risks that forward reasoning misses.

**Second-order effects.** The first-order effect of an action is usually
obvious and is why people do it. The second- and third-order effects are
where most surprises live. Ask: "and then what happens? And then what
happens after that?" at least twice.

**Incentives.** Look at what people are actually rewarded for, not what
they say their goals are. Munger's line: "show me the incentive and I'll
show you the outcome." Misaligned incentives predict behavior better than
stated intentions do.

**Circle of competence.** Be honest about where real expertise ends. The
question isn't "could I have an opinion on this" — it's "do I actually
have a track record or mechanism for knowing this, or am I guessing with
confidence." Flag it explicitly when a problem has drifted outside it.

**Opportunity cost.** The real cost of a choice is the best alternative
given up, not the sticker price. Ask "compared to what?" before evaluating
whether something is a good use of time, money, or attention.

**Base rates.** Before reasoning about the specifics of this situation,
ask what typically happens in situations like this. Specific, vivid
details about *this* case often crowd out the boring statistical reality
of similar cases — check the base rate first, then adjust.

## How to use these in a response

1. Restate the problem in one sentence to confirm you're solving the right
   thing.
2. Pick the tools that actually apply — usually 1-3, rarely all 6. Naming
   all of them regardless of fit is exactly the "label instead of think"
   failure mode to avoid.
3. Work the problem with them, showing the reasoning, not just the
   conclusion.
4. If two tools point in different directions (e.g. base rate says one
   thing, this-case-specifics say another), say so — that tension is
   often the most useful part of the answer.

## Failure mode to avoid

Don't just attach a model's name to what the person already said as a
way of sounding smart ("ah, that's just opportunity cost"). If the label
doesn't change the answer, it wasn't worth naming.

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