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Mental Models8 min read

Mental Models for Decision Making Under Uncertainty

You never have 100% of the data. How to use "Regret Minimization" and "Inversion" to make smarter bets.

Mentasm Team

The Mentasm Team

December 16, 2025

Decision Making Under Uncertainty

1. Regret Minimization Framework (Bezos)

Project yourself to age 80. "Will I regret trying this and failing?" -> Probably not. "Will I regret never trying?" -> Absolutely. This clarifies "safe" vs "risky". Staying in a boring job is actually the risky path (risk of regret).

2. Inversion (Munger)

Instead of asking "How do I make this company succeed?", ask "How do I kill this company?"

  • Run out of cash.
  • Fight with co-founder.
  • Build something nobody wants. Now, avoid those 3 things. Solving problems backwards is often easier.

3. Second-Order Thinking

First Order: "I'm hungry, I'll eat a donut." Second Order: "If I eat a donut, I'll crash in 1 hour." First Order: "I'll ship this feature to close the deal." Second Order: "If I ship this custom feature, I'm now a consulting shop, not a product company." Always ask: "And then what?"