No. 56 · Risk · Physics
Chaos Theory
Some systems follow exact rules yet still cannot be predicted far ahead.
In the Almanac
“Poincaré’s prize”, 1890 · “The Flash Crash”, 2010
Both stories in full, three ways to use it and where it misleads.
Get the AlmanacQuestions
What is Chaos Theory?
Chaos Theory studies systems that follow precise rules yet become unpredictable over time, because tiny differences in starting conditions keep growing. Chaos isn't randomness; it's order too intricate to forecast far ahead.
How do you use Chaos Theory?
Use it to plan for surprises instead of predictions. Keep emergency buffers, shorten feedback loops at work, and build slack into busy family calendars. Trust short-term forecasts more than long-term ones, and adapt as you go.
When does Chaos Theory matter?
Chaos Theory is one of the 32 mental models for risk, the situations where you ask: What could go wrong, and what will I do if it does? Within that, it belongs to “The unexpected”, alongside Black Swan Event, Boiling Frog and Butterfly Effect.
What is an example of Chaos Theory?
Two stories show it at work: Poincaré’s prize (1890) and The Flash Crash (2010). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Chaos Theory?
Butterfly Effect, Margin of Safety and OODA Loop. Chaos Theory itself comes from physics.