Second-Order Thinking
Consider the consequences of consequences.
Explanation
Most people only think about the immediate consequences of their decisions (first-order thinking). Second-order thinking means asking 'And then what happens after that?' and 'What will other people do in response?' This deeper thinking prevents unintended consequences and is what separates good decision-makers from poor ones.
Real-World Example
Cutting prices to beat competitor: 1st: Win customers. 2nd: Competitor cuts more, price war begins. 3rd: Both companies unprofitable, quality drops. Uber giving drivers bonuses: 1st: More drivers join. 2nd: Market floods, less rides per driver. 3rd: Drivers quit, need bigger bonuses. Working weekends to impress boss: 1st: More work done. 2nd: Expectation set, burnout builds. 3rd: Performance drops, health issues, quit.
How to Apply
For any decision, map three levels: Immediate result → What that causes → What THAT causes. Ask: How will competitors respond? What behavior does this incentivize? What precedent am I setting? If everyone did this, what would happen? Pro tip: Write it out. Our brains can't track multiple cause-effect chains mentally.