The Occam shaver’s law, the method of reliance on the theory, the law of mushrooms… these seemingly tall economic laws, the name is indeed a bit easy to remember, but the truth that the big guys summed up is indeed easy to understand and worthy of pondering. Share some interesting economic principles with everyone today and learn from successful people.
1
Occam’s Shaver Law

The most common form of the principle of Occam’s Razor, Ockham’s Razor is that when you have two competing theories that can come to the same conclusion, then the simple one is better. The simplest explanation is often more correct than the complex explanation. So remember: keep things simple!

2
Rely on theory

As in the physical world, economic life has a mechanism of increasing returns and self-improvement. The result of this mechanism is that once people choose a certain path, they will strengthen themselves from time to time in the future.

For individuals, once people make certain choices, they will invest in various resources from time to time on the original road. Until someday they find that the path they choose has no value for themselves. Only then will they make new ones. select. It was at this time that they discovered that the huge investment in the previous period may become worthless due to re-selection. For anyone, this is a big loss. So, it’s important to cultivate the right habits!
3
Mushroom law

I believe that many people have a “mushroom” experience, but it is not necessarily a bad thing, especially when everything is just beginning. When a few days “mushrooms” can eliminate many unreal dreams and bring us closer. reality. For an organization, the new employees are all on a blank sheet, and the talents and experience are not much different. Therefore, the starting salary and the tasks for the employees will not be much different.

No matter how excellent the talents, the first task can only be started from the simplest things. Just like silkworm cocoon, it is a necessary step before feathering.
4
Matthew effect

The “poorer the poor are, the richer the richer” is the “Matthew effect”.

In daily life, such examples are numerous; many people with friends will make frequent contacts to make more friends, while those who lack friends often tend to be lonely from time to time; beautiful people, more attractive, more attractive It is also easier to flatter people; the higher the level of education a person receives, the more likely they are to work or live in a highly educated environment.

The same is true of money: even if the investment returns are the same, a person who has ten times more capital than others will earn ten times more; the big bankers in the stock market can make waves, while small investors often lose everything; companies with strong capital can Indulge in the use of various marketing techniques to promote your products, and small businesses can only live in the gap.
5
80/20 rule

The 80/20 Rule was created by the Italian economist Vilfredo Pareto (1848-1923).

This rule boils down to a simple result: If 20% of people own 80% of wealth, then it can be guessed that 10% of the people have 65% of their wealth, and 5% of the people have 50% of their wealth. What management scholars see is the idea that this result is expressed, that is, the existence of an unbalanced relationship is indeed qualitative and predictable.

There is an unbalanced relationship between cause and effect, effort and gain. The typical situation is: 80% of the harvest comes from 20% of the effort; the other 80% of the effort only brings 20% of the results. With less input, you can get more output; with small efforts, you can achieve great results; the key few are often the main factors that determine the efficiency, output, profit and loss, and success or failure of the entire organization.
6
Washington Collaboration Law

One person perfunctory and guilty. Two people push each other, and three people will never have a day.

As early as 1920, ghost psychology Liegman stopped an experiment to discuss the impact of group behavior on the efficiency of individual activities. He asked the workers to try their best to pull the rope and measure the pulling force. Participants participated in three forms of measurement: individual pulling alone, pulling 3 at the same time, and pulling 8 at the same time. The results are: the average personal pulling force is 63 kg; the total pulling force of the three groups is 160 kg, and the per capita is 53 kg; the total pulling force of the 8 people group is 248 kg, and the average per person is 31 kg, which is only half of the effort when the individual pulls.

Liegman referred to this phenomenon in which individuals are less hard-working in the team as “social slackness.”

7
Herding

“Herding” was the first term in stock investing. It mainly means that investors in the market are like sheep. The so-called main force is the informed person. They are in the leading position. When they turn around, they are other investors. Their behavior will tend to be consistent with them, causing them to buy and sell the same stocks for a certain period of time. The result is often caught in a tight grip and remorse.

8
Catfish effect
In ancient times, Japanese fishermen went to the sea to catch squid. Due to the small size of the ship, the squid was almost dead on returning to the shore. However, there is a fisherman who is very fortunate that the fish he catches can live ashore. Naturally, his fish can sell at high prices, but others can only look dry.

It was not until the fisherman became seriously ill that he could not go fishing. He told his son the secret. It turned out that he put some pike in the cabin of Shengyuyu. Mackerel and pike are inherently dead, and in order to deal with the pike, the carp must fight back hard. Both rivals are in a state of tension and the natural nature of nature is mobilized.

The wise fishermen also realized the reasoning of life through this phenomenon: Be courageous in accepting challenges, as long as the challenges are met, life will be filled with anger and hope.

9
Inverted pyramid effect

The “inverted pyramid effect” has inverted the traditional pyramid organization graph to make the most basic employees occupy a supreme position, thereby arousing their enthusiasm. This is the easiest way for the management to respect employees, and it is also for companies to make big profits. The effective method.

Traditional forms of governance: top level: decision makers, general managers; middle level: department managers, workshop directors; lowest level: front-line employees, also called policy implementers.

The “Inverted Pyramid” architecture is: the top level: front-line staff, also called on-site decision makers; middle layer: department managers, workshop directors; bottom level: presidents, also called policy monitors.