are made at the margin. The question is never "should we do this at all?" in the abstract — it is "should we do one more unit?" Marginal benefit is the extra benefit...
The core idea
are made at the margin. The question is never "should we do this at all?" in the abstract — it is "should we do one more unit?" Marginal benefit is the extra benefit...
Connected
Mental Model
Mental ModelAsymmetric Payoffs
situations where the upside is uncapped and the downside is limited. The expecte
Mental Model
Mental ModelBarriers to Entry
obstacles preventing new competitors from entering a market.
Mental Model
Mental ModelCollective Action Problem
incentives to free-ride undermine cooperation for shared benefit.
Mental Model
Mental ModelComparative Advantage
where your opportunity cost is lowest, not where you are best.
Mental Model
Mental ModelCreative Destruction
destroys established industries to create new, more valuable ones.
Mental Model
Mental ModelEconomies of Scale
scale drives lower unit costs, creating compounding cost advantages.