Darya Sinusoid, Author at Shortform Books

Economic Inflation and Deflation: What’s the Difference?

What is the difference between inflation and deflation? Can inflation and deflation be happening simultaneously? What is the problem with having extreme inflation or deflation? In the most simplistic terms, inflation is the general increase in prices, while deflation is the overall decrease. Inflation and deflation can happen simultaneously in different classes. Both are problematic for an economy when taken to their extremes. Keep reading to learn about the difference between inflation and deflation and why either is economically problematic.

Probability in the Real World: Beyond Mathematics

Are you a good judge of probability? Do you take into account probability when making decisions that involve an element of risk? According to former options trader Nassim Taleb, most people have a poor grasp of real-world probability, and as a result, they misunderstand the likelihood of rare events and consequently don’t plan for risk appropriately. In his book Fooled by Randomness, he cites three reasons for our difficulty in understanding how probability plays out in the real world: 1) we don’t properly interpret the past, 2) we can’t predict the future, and 3) we don’t insure against risk properly.

Daniel Pink: The Psychology of Intrinsic Motivation

What is intrinsic motivation? How does the intrinsic drive compare to extrinsic rewards when it comes to performance? Intrinsic motivation is a desire to do something for internal satisfaction, not for external rewards. External rewards (e.g. financial compensation) enhance performance in the short term, while intrinsic motivation is more enduring—it doesn’t decay as external rewards do. In this article, we’ll look at the psychology of intrinsic motivation, and the role of intrinsic rewards in performance enhancement.

The Types of Financial Investments and How They Work

3 Major Tips From Charlie Munger on Investing

What is a financial investment? Why do people invest their hard-earned money in spite of the unpredictability of return and other risks? Investment is the sacrificing of money, goods, and services today to have more valuable money, goods, and services in the future. Because the future is unknown, investments necessarily involve risks, which must be compensated to make it worthwhile for people to undertake the investments. In this article, you’ll learn about the types of financial investments, how they work, and their associated risks.

The Key Characteristics of a Monopoly Market Structure

What are monopolies? Why are they harmful to economies? In short, a monopoly exists when a specific person or organization is the only supplier of a particular good or service. This causes a market distortion and reduces consumer welfare. Monopolies face little to no economic competition to produce goods, have few substitutes that consumers can use instead, and are able to price well above what an efficient market would otherwise produce. In this article, we’ll explain the characteristics of the monopoly market structure and discuss how monopolies are maintained.

Adaptive Interventions in Leadership: Adapt or Fail

What are adaptive interventions? What is the best time to launch an adaptive initiative? In the context of leadership, adaptive interventions are measures put in place to address “adaptive challenges”—unexpected problems with no known solutions. You can launch an adaptive intervention at any moment of tackling the adaptive challenge, whether that’s during diagnosis or while another intervention is ongoing. In this article, you’ll learn how to develop adaptive interventions and initiatives.

Cognitive Shortcuts: The Dangers of Speed Thinking

What are cognitive shortcuts? What role do they play in survival? What are the dangers inherent in shortcut thinking? Our brains have developed shortcuts of thinking that allow us to react quickly and decisively to threats. Unfortunately, these shortcuts often lead us to believe many things without fully thinking them through. As a result, our views of the world are often based on misunderstandings and biases we unwittingly hold. We’ll consider a few of these misunderstandings and biases below.

Make It Stick: Book Overview & Key Takeaways

What is the book Make It Stick about? How can applying the book’s lessons help become more effective at learning? In their book Make It Stick, co-authors Henry L. Roediger III, Mark A. McDaniel, and Peter C. Brown teach you the strategies that help you achieve the two primary goals of learning: to understand and remember what you learn so you can use your knowledge in future situations. Drawing from a vast number of research studies, they discuss the most effective learning strategies and caution against learning techniques that turn out to be counterproductive. Read all about the key concepts

The Two Types of Motivation: Type X vs. Type I

What are the two types of motivation? Which type of motivation is more sustainable? In psychology, motivation is primarily categorized into two types: extrinsic and intrinsic. Intrinsic motivation is a natural, internal drive to engage in an activity, whereas extrinsic motivation is driven by external factors (e.g. financial rewards). While extrinsic rewards can motivate behavior in the short term, intrinsic motivation is more sustainable in the long term. In this article, we’ll look at the psychology behind intrinsic and extrinsic motivation, and why intrinsic rewards are more sustainable in the long run.

Price Control in Economics: The Pros and Cons

Why do governments enact price controls? How do they determine what the appropriate prices are? And what happens when a good or service is priced either too low or too high? In economics, price controls are regulations set by governments to ensure goods and services are appropriately priced. When the pricing is mis-optimized, it causes misallocation of resources. The real losses come from the misallocation of scarce resources and a reduction in the total wealth of society. In this article, you’ll learn when the government intervenes in the pricing of goods and services and the implications of these interventions.