No. 16 · Decisions · General Thinking
Counterfactual Thinking
To know what made a difference, ask what would have happened without it.
In the Almanac
“America without railroads”, 1964 · “JPMorgan Chase”, 2017
Both stories in full, three ways to use it and where it misleads.
Get the AlmanacQuestions
What is Counterfactual Thinking?
Counterfactual Thinking means imagining how events would have unfolded if one factor had been different. It is the only way to judge whether a decision, product or habit really made a difference, or whether the result would have happened anyway.
How do you use Counterfactual Thinking?
Use it by finding a comparison: a month, region or person without the change. Test by removal, pausing something to see what shifts. And use balanced what-ifs to put regrets in perspective.
When does Counterfactual Thinking matter?
Counterfactual Thinking is one of the 35 mental models for decisions, the situations where you ask: Which way should I go? Within that, it belongs to “Thinking ahead”, alongside Exit Strategy, OODA Loop and Second-Order Thinking.
What is an example of Counterfactual Thinking?
Two stories show it at work: America without railroads (1964) and JPMorgan Chase (2017). 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 Counterfactual Thinking?
Correlation and Causation, Randomised Controlled Experiments and Deprival-Superreaction Tendency. Counterfactual Thinking itself comes from general thinking.