PRINCETON – We live in a complicated world, so we are forced to simplify it. We categorize people around us as friends or foes, classify their motives as good or bad, and ascribe events with complex roots to straightforward causes. Such shortcuts help us navigate the complexities of our social existence. They help us form expectations about the consequences of our and others’ actions, and thereby facilitate decision-making.
But, because such “mental models” are simplifications, they are necessarily wrong. They may serve us well as we navigate our daily challenges, but they leave out many details and can backfire when we find ourselves in an environment in which our categorizations and ready-made explanations fit less well. The term “culture shock” refers to situations in which our expectations about people’s behavior turn out to be so wrong that we find ourselves jolted by the experience.
And yet, without these shortcuts we would be either lost or paralyzed. We have neither the mental capacity nor the understanding to decipher the full web of cause-and-effect relations in our social existence. So our daily behavior and reactions must be based on incomplete, and occasionally misleading, mental models.
The best that social science has to offer is in fact not much different. Social scientists – and economists in particular – analyze the world using simple conceptual frameworks that they call “models.” The virtue of such models is that they make explicit the chain of cause and effect, and therefore render transparent the specific assumptions on which a particular prediction rests.