Latticework of Mental Models: Domain Dependence

Imagine this. You are escorted into a room. On one corner there’s a table with three items on it: a box of board-pins, a matchbox, and a candle. Your task is to attach the candle to the wall, so the wax doesn’t drip onto the table.

A psychologist named Karl Duncker first designed this experiment in 1945.

About seventy-five percent of the participants who take part in this experiment try following solutions.

First, they try to pin the candle onto the wall. It doesn’t work. Then they try to light the candle and use the dripping wax to attach it to the wall, but that’s usually not strong enough to hold the candle. So that doesn’t work either.


What about you? How would you solve this? Take a moment and think about it.

Very few people see the solution at once. Some people find it after only a minute or two of thought. Others see it after stumbling through several unsuccessful attempts. Most fail to solve it without some outside help.

Here’s a hint – think outside the box. A cliche, isn’t it?

Since ages, thinking outside the box is an overused, rather over-abused, phrase by every creativity expert. However, in this candle problem, you literally have to think outside the box.

Which box? The one that holds the board pins.

By the way, this is not a test of your intelligence so don’t worry if you couldn’t solve it. The experiment is meant to reveal how the human mind works.

Here’s one possible solution –

Take out the pins from the box and pin the box to the wall. Light the candle. Soften the bottom of the candle with a match, so that the wax begins to drip into the box, and place the candle inside the box, on top of the soft pillow of wax. Secure.

For a visual illustration of the solution, scroll down to the end of this post.

The candle problem has been used by several psychologists in hundreds of different experiments to research the human behaviour.

Today, we’re going to use this problem to explore a behavioural bias called Domain Dependence.

In the candle problem, why don’t so many people see that alternative use of box?

Most people in this situation do not see that something obvious—a box of board pins—might be something less obvious: a box and pins. Scientists have a name for this – functional fixedness.

Functional Fixedness

We tend to see objects the way they are presented. We assume that the object is supposed to serve the specific function that is already assigned to it.

Our knowledge about the utility of the box gets frozen by its domain, i.e., as a container to hold objects. In other words, the box containing the pins gets us hooked into the domain of “box as a container” realm. We fail to think outside that realm.

This limitation of our ability to pass the knowledge from one domain to another is called domain dependence where “Domain” is an area or category of activity.

Nassim Taleb, in his book Antifragile, writes –

Some people can understand an idea in one domain, say, medicine, and fail to recognize it in another, say socioeconomic life…humans somehow fail to recognize situations outside the contexts in which they usually learn about them…Imagine someone capable in learning languages, but unable to transfer concepts from one tongue to another, so he would need to relearn “chair” or “love”, or “apple pie” every time he acquires a new language. He would not recognize “house”(English) and “casa” (Spanish) or “beyt” (Semitic). We are all, in a way, handicapped in a similar way, unable to recognize ideas when presented in a different contexts. It is as if we were doomed to be fooled by the most possibly superficial part of things, the packaging, the gift-wrapping paper around the object…[Because of the domain dependence] of our reactions, our mode of thinking, our intuitions, depend on the context in which the matter is presented.

Put simply, insights do not pass well from one field to another. What you master in one area is difficult to transfer to another. Especially daunting is the transfer from academia to real life—from the theoretically sound to the practically possible. The classroom is one do­main; real life is another. Theory is one domain, practice is another.

Yogi Berra famously said, “In theory, there is no difference between theory and practice, but in practice there is.”

We are simply too accustomed to thinking about things in our familiar ways to see the simple truth staring at us from the other side of the mirror. It gets worse as we gain more expertise in a specific domain. Expert knowledge becomes more and more domain-specific precisely because it’s very deep in one area.

Our brain lacks a central all-purpose computer that starts with logical rules and applies them equally to all possible situa­tions, writes Nassim Taleb, “Our brain functions by “modules.” An interesting aspect of modularity is that we may use different modules for different instances of the same problem, depending on the framework in which it is presented…One of the attributes of a module is its “encapsulation,” i.e., we cannot interfere with its functioning, as we are not aware of using it. “

For example, a chess player isn’t necessarily a good strategist in real life. In fact, most chess players aren’t. The part of their brain that creates strategies for a game of chess remains unused while thinking about real-life situations.

Here’s an unsettling insight on domain dependence from Nassim Taleb –

Another expression of domain dependence: ask an U.S. citizen if some semi-governmental agency with a great deal of independence (and no interference from Congress) should control the price of cars, morning newspapers, and Malbec wine, its domain of specialty. They would jump in anger, as it appears to violate every principle the country stands for, and call you a communist post-Soviet mole for almost suggesting such a thing. OK. Then ask him if that same government agency should control foreign exchange. Same reaction, this is not France. Then very gently point out to him that the Federal Reserve Bank of the United States is in the business of controlling and setting the price of another good, another rate, called lending, the interest rate in the economy. The libertarian presidential candidate Ron Paul was called a “crank” for suggesting the abolition of the Federal Reserve, but he would also been called a crank had he suggested the installation of a new governmental agency for controlling and “managing” foreign exchange, mainly the rate of the dollar against the Euro and the Mongolian Tugrit. You can only become intellectually an adult, so to speak, if you break through domain dependence.

In Investing

So how does domain dependence corrupt the decision-making process in the world of business and investing?

Many newly appointed CEOs falter at the most critical task, i.e., capital allocation because they find themselves unable to transpose their success in other fields to the domain of efficient capital allocation. As Warren Buffett has observed in his 1987 letter to shareholders, very few CEOs come prepared to overcome this domain dependence –

The heads of many companies are not skilled in capital allocation. Their inadequacy is not surprising. Most bosses rise to the top because they have excelled in an area such as marketing, production, engineering, administration, or sometimes, institutional politics. Once they become CEOs, they now must make capital allocation decisions, a critical job that they may have never tackled and that is not easily mastered. To stretch the point, it’s as if the final step for a highly talented musician was not to perform at Carnegie Hall, but instead, to be named Chairman of the Federal Reserve.

When Charlie Munger cleverly said, “To a man with a hammer, everything looks like a nail”, he used a visual metaphor to describe domain dependence.

Sometimes people make the mistake of blindly applying ideas from one domain to another without really understanding the context and the characteristics of the domains in which they are operating.

Prof. Bakshi quotes one such example on his blog –

In the past, and even now, people talk about the Kelly Formula to think about position sizing in equity portfolios. In my view, that’s a flawed idea taken from one domain (the casino where all outcomes are known and follow a bell curve distribution) and applied in another domain (the stock market where all outcomes are not known and often there are huge outlier effects).

Overcoming Domain Dependence

As we get more and more focused on one area of work it gets harder and harder to look outside our own domain for solutions to our problems.

Our domains are our comfort zones. Innovation and creativity demand from us to explore outside our domains.

In the candle problem, the box and pins go together as a box-of-pins. The box holds the pins; that’s the basic, but deceiving, assumption about what the box can do.

It takes an imaginative leap to bulldoze our assumptions and realize that the box and pins are two different things.

And imagination is about making connections that are not obvious at first. It requires creativity and knowledge of basic building blocks (mental models) across several disciplines.

That’s why Charlie Munger urges us to learn all the big ideas from major disciplines and create a latticework, a scaffolding, of those big ideas.

This latticework lets you build the mental muscle which cuts through different disciplines and domains while thinking about a problem. You gain useful vantage points to see a situation or a problem.


We learned when we can’t recognize the forces at play outside of the system in which we’ve learned about them, we become domain dependent. The blinders of domain dependence occlude the obvious patterns in unfamiliar situations. Because of domain dependence, our mind doesn’t recognize simple solutions in other places.

In the end, domain dependence is just a fancy word for our prejudices and pre-conceived notions. Most kids are free of such limitations. Unfortunately, as they grow and learn the ways of the world they stop questioning things, suppress their curiosity, start taking things for granted. And before you know it the domain dependence becomes the defining characteristic of a mature adult.

Don’t let domain dependence become a handicap for you. Expand your area of learning. And the simplest way to do that is to follow your curiosity.

One consistent source of innovation has been the transfer of ideas from one field to another. People who could overcome the limitations imposed by domain dependence have not only made a breakthrough in hard problems but many of them have gone ahead to pioneer remarkable discoveries in diverse fields.

Isaac Asimov is considered to be the father of sci-fi literature. He inspired many of the present generation tech billionaires who grew up reading his work (Asimov penned down more than 400 books). Asimov’s imagination was unparalleled.

In his book, Asimov’s New Guide to Science, he wrote –

Almost in the beginning was curiosity.

Let your curiosity be the reason for learning. That’s how you’ll go to bed smarter than you woke up.

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