Look for the U-shaped curves (Mental Models II)

When looking at any phenomenon, our instinct is often to think about it as linear or exponential – and when we draw curves those are the ones that most readily come to mind. But there is a class that let’s us think differently and could be useful to apply in analysing any problem – the U-shaped curve.

The U-curve as mental model is a useful testing tool.

There are several interesting examples of U-shaped curves in the literature, such as:

Midlife satisfaction. We are unhappiest around 40-50 and then start becoming happy again.

Returns on years in education. In many countries the returns on secondary education are less than on primary or tertiary.

Alcohol consumption. Moderate consumption is argued – though this is contested now – to have a slight positive effect on health.

Magazine readership. Either people subscribe and read religiously or just read a single issue. (True for TV-series too?)

Some have argued that the U-shaped curve is also found in the relationship between GDP and democracy – that as GDP per capita increases states risk sliding into autocracy, but when everyone becomes affluent the result is different.

Other examples could include the Solow paradox – that we see investments in information technology everywhere but in the productivity statistics. Maybe that is a U-curve phenomenon, and we just need to invest more? In fact, this does seem somewhat likely when you think about technology introduction in organizations – it slows down the organization at first but as the investment in technology and training to use the technology (an investment as well, of course) increases we see productivity gains.

The reversed U-curve can be found in the value of data – where too much simple devolves into noise, and where the costs of finding the data that is useful routinely becomes higher than the value you expect the data to have for you in, say, decision making.

The reverse U-curve may also be found in the relatiuonship between the size of a company and its perceived social value, at least that seems to be the case in a few of the on-going discussions about the tech-lash where size alone is seen as problematic.

And, of course in mortality in diseases and epidemiology – where both the U curve and reversed U-curve can be found in different pandemics — and where the shape of the disease foot print matters for any strategy we adopt.

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