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52 Concepts To Add To Your Cognitive Toolkit

Concepts change the way we think. Before we
knew about evolution, we couldn’t explain
much of what was going on around us; for
example, how there came to be such a
diversity of species on earth. We’ve collated a
list of some concepts that have changed the
way we think about the world that might be
useful additions to your cognitive toolkit.

Not all of them are useful – in fact, you’ll find some to be downright useless. People
seem to be at different stages in their patterns of thinking: perhaps at your stage #7 will
be too obvious or inapplicable, while #26 will be just the idea you need to help answer
some problems you’ve been thinking about. We wrote this list because we’re sure us-of-
the-past would have appreciated such a list. We hope you do too. We’re always on the
hunt for concepts and the like – if any come to mind, please leave them in the
comments.

There really is so much more to be said on most of these points than we have here.
However, we’ve tried to keep things brief, simplifying where necessary, while providing
lots of links for those who are interested in reading further. Looking at links will be of
particularly high value for this post, as many of these concepts will seem obvious and
scarcely worth saying when you simply read their definition. It’s only in seeing their
application and how that changes your thinking that you can realise their value.

1. Signalling/ countersignalling – the idea that an action conveys information to

someone about the actor. Buying an expensive wedding ring conveys that you
don’t think you’re about to run off immediately after the wedding (lest you lose
three months of your salary). Countersignalling is when the information you’re
trying to signal is so obvious that you need not have signalled in the first place.
For instance, Warren Buffett doesn’t need to drive around in a Ferrari to signal
how rich he is – everybody already knows that – and not driving around in a
Ferrari differentiates him from the plebs that do need to drive one. Note: Buffett
still lives in his house in Omaha that cost $31,000 back in 1958, despite being
worth billions, but possibly for reasons other than countersignalling.
2. Nudge – the manner in which choices are presented to a target audience can
have dramatic effects on their chosen action – even without changing the
incentives which might typically motivate an individual to make a given choice.
You can install News Feed Eradicator to decrease the likelihood of your future
self spending all day scrolling
through Facebook. The tax office
can write letters saying that 90% of
people who work the same job as
you have completed their tax return
already. Your electricity company
can install an electricity meter which
constantly reminds you how many
watts you’re chewing through at a
given time. Male urinals are Buffett’s house.
sometimes made with a small and
shoddy picture of a housefly in the
centre of them as a target to reduce, err, puddles.
3. Marginal thinking – what are extra resources worth? If you have no bananas, and
you get a banana, it’s probably worth more to you than if you already had one
million bananas and you get an extra. This is an important concept because it
might lead to the realisation that not all the bananas hold the same value to you.
Slightly less trivially, what matters with your charitable donation is what happens
with that donation, not the average of what the charity achieves. Extra donations
to distribute bed nets could do more once there are already the distribution lines
established, so it could achieve more. Conversely, it might be already distributing
at capacity, and extra donations buy bed nets for $10 instead of $5. Fortunately,
the Against Malaria Foundation will still be able to distribute bed nets at
exceptional efficiencies, and is a great target for your festive givings.
4. System 1 & System 2 thinking – when we’re making decisions, we use two
different systems. System 1 is fast and subconscious, often described as our ‘gut
feeling’. It has an edge in social situations or when time is a limiting factor.
System 2 is slower and more methodical, better with models and numbers, and
deliberate.
5. Comparative vs. absolute advantage – if you are better than me at earning an
income from your job and cleaning the house, you have an absolute advantage
in both these activities. Does that mean that both of us are better off if you do
both? Not necessarily. Suppose you earn $100/hour at work, 10 times more than
my $10/hour and further that you clean the house approximately twice as fast as
I do. Of these two jobs, I’m ‘least bad’ at cleaning the house, so it might be
(depending on the social costs that this arrangement incurs) that both of us
would be better off if you paid me $25 an hour to clean your house. Generally,
people should do the action that
they’re the least bad at, thus
working to their comparative
advantage.
6. Efficient market hypothesis – there
are many people approximately as
clever as you who value
approximately the same things you
do. It’s unlikely you’ll be walking
down the street and stumble on
$100 000 sitting on the ground
which no one else has picked up. In System 1 and System 2
the same way, it’s unlikely you’ll be
able to choose a company on the
stock market that will do 100 times better than the average company which no
one else has already found and invested in (driving the cost of parts of the
company (shares) up). This is the same reason why you might have a hard time
finding a car park that is (i) free, (ii) right next to work, and (iii) somewhere you
can park in all day. Even though such car parks do exist, over time word gets out,
and they are occupied in the short term or monetised in the long term. Everything
is a market. Thus, when taking the efficient market hypothesis into account, you
should 1) look for the things you value in places that other people have
systematically failed to look, and 2) think that if something looks too good to be
true, it probably is.
 7. Illusion of transparency – we tend to overestimate how much our mental state is
known by others, a fact not helped by the ambiguity of the English language.
“Elizabeth Newton created a simple test that she regarded as an illustration of
the phenomenon. She would tap out a well-known song, such as “Happy
Birthday” or the national anthem, with her finger and have the test subject guess
the song. People usually estimate that the song will be guessed correctly in
about 50 percent of the tests, but only 3 percent pick the correct song. The
tapper can hear every note and the lyrics in his or her head; however, the
observer, with no access to what the tapper is thinking, only hears a rhythmic
tapping.” – Wiki. This phenomenon applies equally well to explanations of novel
concepts and the interpretation of emotional states.
8. Opportunity cost – when we choose to take one option, we are implicitly not
taking another. If you only have enough room for one meal and your favourite is
the Pad Thai, you choose it. But this means you can’t also get the Massaman
curry (your second favourite). Economists call this your opportunity cost — your
choice minus the benefits of the next best alternative. Opportunity costs are
everywhere and form a critical part of decision making. If you’re not donating to
the very best charity, you’re not helping others as much as possible.
Furthermore, if you don’t spend your time in the best way possible, that is coming
at a cost.
9. Cognitive biases – these are systematic flaws in how we think. We don’t look for
information that proves us wrong. We estimate that events we can easily recall
(perhaps because they happened more recently, or frequently appear in the
media) are more likely to occur than they are. We’re overconfident. Particularly
relative to our level of expertise. And a whole bunch more. The plot thickens: it’s
only our friends and colleagues who are biased. (Author’s caution: don’t become
fallacy (wo)man).
10. Heuristics – we use rules of thumb to make decisions under conditions of
uncertainty (which turns out to be almost every single decision we make). This is
both a blessing and a curse. It’s quicker, useful when we don’t have much
information we could deal with explicitly. But also by its nature requires us to
make generalisations that might not turn out to be true. It pays to notice that we
are using them because they can be wrong.
11. Counterfactual reasoning – what might have happened otherwise? You could
push the paramedic out of the way and do the CPR yourself, but you’ll likely do a
worse job. So even if you stop the patient from dying, your (counterfactual)
impact is likely small, if not negative. Doctors wanting to make a big difference
will do more good if they travel to a developing country where their patients might
not have received quality healthcare if not for them.
12. Bayesian reasoning – assigning a probability before an event, receiving
evidence, and updating the probability you assigned. This is beneficial insofar as
it forces us to think probabilistically. Moreover, it allows us to account for
competing evidence and promotes a nuanced view, thus avoiding a simplistic
black and white application of ‘good and bad’ outcomes.

13. Expected value – the probability of

each outcome multiplied by the
value of each outcome. For
example, a 50% chance of winning
$100 is worth $50 to you, and you
should be willing to invest up to $50
for a chance to win (but no more).
Applied example: If you have two
mutually exclusive ways of helping
people, should you take the 10% Bayes’ Theorem

chance of helping 1 billion people,

or the 90% chance at helping 1 million (an equal amount as the billion, and
holding all else equal)? Without using expected value, this is a nearly impossible
question to evaluate.
14. Time value of money -we’d prefer to have $100 today than tomorrow, or in a
year’s time. In a real sense, this implies that money today is worth more than
money in the future. This preference comes from the opportunities we have to
invest it at (say) 5% interest and gain $5 in that year. How much less you’d be
willing to receive now than in a year, is the discount rate (which is 5% in this
example).
15. Prisoner’s dilemma/ Tragedy of the commons – a problem in game theory that
explains a lot of real world problems. In this situation, there are two players
choosing between cooperating and not cooperating. You both do well if you both
cooperate. But if you don’t cooperate while the other player tries to cooperate,
you do even better. If both of you don’t cooperate then neither of you do well. But
if you’re the chump who tries to cooperate while the other player doesn’t, you get
screwed worst of all. Examples of this include countries individually benefitting
economically from not limiting their carbon emissions, to everyone’s detriment;
athletes using performance enhancing drugs to be more individually competitive,
when all athletes would be worse off if everyone did it; everyone in society
benefits from paying taxes to get roads, but each citizen would rather have the

road and not pay taxes herself; etc..

16. Revealed preferences – talk is cheap, and our actions reveal more about our
preferences than we’d like to believe. For instance, although I might say that
Marmite is my favourite spread to put on toast, I actually buy Vegemite
(#justaustralianthings). As such, my actions reveal what I really prefer. In another
example, while Tesla might survey thousands of Australians, of which 60% say
they’d pay extra for a greener car, when the car actually becomes available, only
10% follow through with their purchase.
17. Typical mind fallacy – the mistaken belief that others are having the same mental
experiences that we are. As the links show, the differences go surprisingly far.
Detailed questionnaires have shown that when some people ‘see’ a zebra in their
mind’s eye, they’re simply recalling the idea of a zebra, whilst others can count
the stripes!
18. The value of your time – You could use your time to earn more money, or do
something else that you value. Even if driving to the other side of town saves you
$10 on groceries, if it takes you an extra hour, you’re implicitly valuing your free
time at $10 per hour. This might be a good deal if you only earn $6 an hour with
the company you started after seeing the story of “This One Single Mom Makes
$1000 Per Hour – Google HATES Her”. On the other hand if your friend Grace
can convert her free time into $50 an hour at work, then for her driving the extra
hour is a poor use of time. What’s more, if both Grace and yourself are
volunteering alongside each other in a soup kitchen when you’d be happy to
work there for $10 an hour, Grace should consider working instead, donating the
money she earns, and employing 5 people like you to run the kitchen per hour
she is at work.
19. Fundamental attribution error – attributing others’ actions to their personality, but
your actions to your situation. You see someone kick the vending machine and
assume it must be because they are an angry person. But when you kick the
vending machine, it’s because you were hot and thirsty, your boss is an asshole,
and the vending machine stole your last goddam dollar.
20. Aumann’s agreement theorem – if two rational agents disagree when they both
have exactly the same information, one of them must be wrong. The ‘same
information’ qualifier is crucial; very often disagreement is due to differences in
information, not failure of rationality. So you should take disagreement seriously if
you have reason to believe the other person has significant information that you
don’t.
21. Bikeshedding – substituting a hard and important problem for an easy and
inconsequential one. When designing a nuclear plant, Parkinson observed that
the committee dedicated a disproportionate amount of time to designing the
bikeshed – which materials should it be made of, where should it be located etc.
These are the kind of questions that everyone is clever enough to contribute to,
and where everyone likely wants to have their opinions heard. Unfortunately,
these might be discussed at the cost of some of crucial detail, like how to prevent

the power plant from killing everyone.

22. Meme – the social equivalent of a gene, except instead of encoding proteins,
they represent rituals, behaviours, and ideas. They self-replicate (when they’re
passed from one person to another), mutate, and some are selected for in a
population – these are the ones that get transmitted. Like selfish genes, the most
useful memes don’t necessarily get reproduced. Rather, it is those that are most
likely to have a trait that is selected for. Memes are interesting because of the
predictions they allow you to make. For instance, there should be few major
social movements in society that don’t have the meme “find (or create) other like-
minded people to join the movement”.

23. Algernon’s Law – IQ is nearly

impossible to improve in healthy
people without tradeoffs. If we could
get smarter by a simple mechanism,
like upregulating acetylcholine,
which had no negative side effects
(in the ancestral environment), then
perhaps evolution would have
upregulated acetylcholine already.
We could equate this with the
‘efficient market hypothesis’ of
improving brain function.
24. Social intuitionism – moral
judgements are made
predominantly on the basis of
intuition, which is followed by
rationalisation. For example, slavery
was previously a social norm and
thought to be acceptable. When
asked a question (“is slavery
good?”), proponents of slavery
introspected an answer (“yes”), and
confabulated a reason (“because
they’re not actually human” or
similar atrocious falsehoods). As
Dawkin invented the meme
this example shows, blind faith in
our intuitions can be harmful and
counterproductive, because they can be easily corrupted by immoral social
norms. It wasn’t just that proponents of slavery got the wrong answer: they had
— and we still have — the wrong process.
25. Apophenia – the natural tendency of humans to see patterns in random noise.
E.g. hearing satanic messages when playing songs in reverse.

26. Goodhart’s law/ Campbell’s law –

what gets measured, gets managed
(and then fails to be a good measure
of what it was originally intended for).
If we use GDP as a measure of
prosperity of a nation, and there are
incentives to show that prosperity is
increasing, then nations could ‘hack’
this metric. In turn, this may raise GDP Jesus?

while failing to improve the living

conditions in the country.
27. Moral licensing – doing less good after you feel like you’ve done some good.
After donating to charity in the morning, we’re less likely to hold the door open for
someone in the afternoon.
28. Chesterton’s fence – if you don’t see a purpose for a fence, don’t pull it down,
lest you be run over by an angry bull which was behind a tree. If you can’t see
the purpose of a social norm, like whether there is any value to having family
unit, you shouldn’t ignore it without having thought hard about why it is there.
Asking people who endorse the family unit why it’s important and noticing their
reasoning is flawed often isn’t good enough either.
29. Peltzman effect – taking more risks when you feel more safe. When seatbelts
were first introduced, motorists actually drove faster and closer to the car in front
of them.
30. Semmelweis reflex – not evaluating evidence on the basis of its merits and
instead rejecting it because it contradicts existing norms, beliefs and paradigms.
Similar to the status quo bias (which one might choose to combat with the
reversal test).
31. Bateman’s principle – the most sexually selective sex will be that which has the
most costs from rearing the offspring. In humans, women have more costs
associated with raising offspring (maternal mortality, breastfeeding, rearing) and
are the more selective sex. In seahorses, the opposite is true: male seahorses
carry the offspring in their pouch, and are more selective with those they choose
to mate with.
32. Hawthorne effect – people react differently when they know they are being
observed.
33. Bulverism – dismissing a claim on the basis of how the opponent got there,
rather than a reasoned rebuttal. For example, “but you’re just biased!” or “of
course you’d believe that, you’re scared of the alternative.”
34. Flynn effect -IQ has increased by 3 points per decade since around the 1930s. It
is hotly debated why this is happening, and whether the trend will continue.
35. Schelling point – a natural point that people will converge upon independently.
For instance, if you and I have to meet in Sydney on a particular day, and we
don’t know when or where, we might go to where we normally meet, or fall back
on meeting at the Opera House at 12PM. This is an important effect in situations
where coordination is essential but explicit discussion is difficult. Furthermore,
participants may not even realise it’s happening. For example, “I don’t want to
live in a society where genetic enhancement of children increases the gap
between the rich and poor. Unfortunately, there’s no clear place at which to say
‘wait, we’re about to reach that society now, let’s stop enhancement!’ Perhaps my
comrades and I should instead object against any genetic manipulation at all,
including selecting for embryos without cystic fibrosis (even if we wouldn’t mind
that particular selection occurring).”
36. Local vs global optima – see the carefully crafted image by yours truly below. In
short, you might need to make things worse in order to get to a global optimum –
the best possible place to be. If you want to earn more, you might have to
sacrifice the number of hours you can work in the short term in order to take a
course which will allow you to increase your income in the future.
37. Anthropic principle – you are given a sleeping pill which will wake you up twice if
heads, and once if tails. You wake up. What is the chance that today is the day
you wake up twice? Similarly, what
is the chance that we’re in one of
the only universes that is capable of
supporting life?
38. Arbitrage – taking advantage of
different prices between markets for
the same products.
39. Chaos theory – “Chaos: When the
present determines the future, but
the approximate present does not
approximately determine the future.” Local vs. Global Optima. We can often get stuck in a
local optimum – it’s a tradeoff between exploration
and exploitation.
40. Ingroup and outgroup psychology –
this doesn’t just explain phenomena
like xenophobia, but also the left-right political divide.
Our circle of concern is probably expanding over time.
41. Red Queen hypothesis – organisms need to be
constantly evolving to keep up with the offenses and
defenses of their predators and prey, respectively.
This is probably the effect we should thank for the A double rod pendulum
animation showing chaotic
existence of sex. behaviour. Starting the
pendulum from a slightly
42. Schelling’s segregation – even when groups only different initial condition
have a mild preference to be around others with a would result in a completely
different trajectory.
similar characteristic – say, a preference for playing
baseball – neighbourhoods will segregate on
this basis.
43. Pareto improvement – a change that makes at least one person better off,
without making anyone worse off.
44. Occam’s razor/ law of parsimony – among competing hypotheses, the one with
the fewest assumptions should be selected.
45. Regression toward the mean – if you get an extreme result (in a normal
distribution) once, additional results are likely to be closer to the average
selection. If one trial suggests that health supplement x is amazingly better than
all the others, you shouldn’t put all your faith in that result.
46. Cognitive dissonance – holding two conflicting beliefs causes us to feel slightly
uncomfortable, and to reject (at least) one of them. For instance, holding the
belief that science is a useful way to discover the truth would conflict with another
belief that vaccines cause autism. In you held both of these beliefs, one would
have to be discarded.
47. Coefficient of determination – how well a model fits or explains data (i.e. how
much of the variance it explains).
48. Godwin’s Law – as an online discussion grows longer, the probability of a
comparison involving Nazis or Hitler approaches 1. At this point, all hope of
meaningful conversation is lost, and the discussion must stop.

49. Commitment and consistency – if people

commit to an idea or goal, they are more
likely to honour the commitment if
establishing that idea or goal is consistent
with their self-image. Even if the original
incentive or motivation is removed after
they have agreed, they will continue to
honour the agreement. For example, once
someone has committed themselves to a
viewpoint in an argument, rarely do they
change ‘sides’.
50. Affective forecasting – predicting how
happy you will be in the future contingent upon some event or change is hard.
We normally guess that the magnitude of the effect will be larger than it actually
is, because 1) we’ve just been asked to think about that event, which makes it
seem more important than it actually is in our everyday happiness, and 2) we
underestimate our ability to adapt.
51. Fermi calculation (aka ‘back of the envelope calculation’) – involves using a few
guesses or known numbers to come to an educated guess about some value of
interest. To illustrate, one could approximately calculate the number of piano
tuners in Chicago by plugging a few estimates like population, percentage of
houses with a piano, and piano tuner productivity into a calculation.
52. Fermi’s paradox – is the problem we confront when we run a Fermi calculation
on the number of habitable planets in our galaxy and realise how weird it is that
we seem to be alone. It leads to some interesting conclusions.
I’d love to hear any suggestions for other
concepts to add to our cognitive toolkits in the
comments.

Co-written by Brenton Mayer and Peter

McIntyre. Thanks to Daniel D’Hotman for
reviewing an earlier draft. Most importantly,
we’ve come across these ideas thanks to
many clever people in the effective
altruism movement trying to understand the
world so that they can improve it. The post has been extensively updated based on
some excellent comments – thanks to those contributors too.