Charlie MungerAnalytical perspectiveCM-P01PRODUCT ADVISORY COUNCIL
Use complementary models
Charlie MungerAnalytical perspectiveCM-P01The method
Use complementary models
Place the facts within complementary models instead of explaining every problem through your familiar specialty.
When to use it
- The problem spans technology, behavior and business mechanisms.
Ask yourself
- Which discipline or mechanism does our explanation omit, and could it change the conclusion?
Put it into action
- Examine resource constraints, probability, incentives and psychological influences separately.
- Write observable predictions for the leading explanations and use facts to rule out models that do not fit.
Keep these limits in mind
- An analogy is not causal evidence; piling up terminology cannot replace validation.
- Models may conflict: state their assumptions and the evidence that would distinguish them.