Model Thinking (Coursera)

Model Thinking (Coursera)

We live in a complex world with diverse people, firms, and governments whose behaviors aggregate to produce novel, unexpected phenomena. We see political uprisings, market crashes, and a never ending array of social trends. How do we make sense of it? Models. Evidence shows that people who think with models consistently outperform those who don't. And, moreover people who think with lots of models outperform people who use only one. Why do models make us better thinkers? Models help us to better organize information - to make sense of that fire hose or hairball of data (choose your metaphor) available on the Internet.

Class Deals by MOOC List - Click here and see Coursera's Active Discounts, Deals, and Promo Codes.

Models improve our abilities to make accurate forecasts. They help us make better decisions and adopt more effective strategies. They even can improve our ability to design institutions and procedures. In this class, I present a starter kit of models: I start with models of tipping points. I move on to cover models explain the wisdom of crowds, models that show why some countries are rich and some are poor, and models that help unpack the strategic decisions of firm and politicians.
The models covered in this class provide a foundation for future social science classes, whether they be in economics, political science, business, or sociology. Mastering this material will give you a huge leg up in advanced courses. They also help you in life. Here's how the course will work. For each model, I present a short, easily digestible overview lecture. Then, I'll dig deeper. I'll go into the technical details of the model. Those technical lectures won't require calculus but be prepared for some algebra. For all the lectures, I'll offer some questions and we'll have quizzes and even a final exam. If you decide to do the deep dive, and take all the quizzes and the exam, you'll receive a Course Certificate. If you just decide to follow along for the introductory lectures to gain some exposure that's fine too. It's all free. And it's all here to help make you a better thinker!
Suggested Readings:

Syllabus

WEEK 1
Why Model & Segregation/Peer Effects
In these lectures, I describe some of the reasons why a person would want to take a modeling course. These reasons fall into four broad categories: 1)To be an intelligent citizen of the world 2) To be a clearer thinker 3) To understand and use data 4) To better decide, strategize, and design. There are two readings for this section. These should be read either after the first video or at the completion of all of the videos. We now jump directly into some models. We contrast two types of models that explain a single phenomenon, namely that people tend to live and interact with people who look, think, and act like themselves. After an introductory lecture, we cover famous models by Schelling and Granovetter that cover these phenomena. We follows those with a fun model about standing ovations that I wrote with my friend John Miller.

WEEK 2
Aggregation & Decision Models
In this section, we explore the mysteries of aggregation, i.e. adding things up. We start by considering how numbers aggregate, focusing on the Central Limit Theorem. We then turn to adding up rules. We consider the Game of Life and one dimensional cellular automata models. Both models show how simple rules can combine to produce interesting phenomena. Last, we consider aggregating preferences. Here we see how individual preferences can be rational, but the aggregates need not be. There exist many great places on the web to read more about the Central Limit Theorem, the Binomial Distribution, Six Sigma, The Game of LIfe, and so on. I've included some links to get you started. The readings for cellular automata and for diverse preferences are short excerpts from my books Complex Adaptive Social Systems and The Difference Respectively.

WEEK 3
Thinking Electrons: Modeling People & Categorical and Linear Models
In this section, we study various ways that social scientists model people. We study and contrast three different models. The rational actor approach,behavioral models, and rule based models . These lectures provide context for many of the models that follow. There's no specific reading for these lectures though I mention several books on behavioral economics that you may want to consider. Also, if you find the race to the bottom game interesting just type "Rosemary Nagel Race to the Bottom" into a search engine and you'll get several good links. You can also find good introductions to "Zero Intelligence Traders" by typing that in as well.

WEEK 4
Tipping Points & Economic Growth
In this section, we cover tipping points. We focus on two models. A percolation model from physics that we apply to banks and a model of the spread of diseases. The disease model is more complicated so I break that into two parts. The first part focuses on the diffusion. The second part adds recovery. The readings for this section consist of two excerpts from the book I'm writing on models. One covers diffusion. The other covers tips. There is also a technical paper on tipping points that I've included in a link. I wrote it with PJ Lamberson and it will be published in the Quarterly Journal of Political Science. I've included this to provide you a glimpse of what technical social science papers look like. You don't need to read it in full, but I strongly recommend the introduction. It also contains a wonderful reference list.

WEEK 5
Diversity and Innovation & Markov Processes
In this section, we cover some models of problem solving to show the role that diversity plays in innovation. We see how diverse perspectives (problem representations) and heuristics enable groups of problem solvers to outperform individuals. We also introduce some new concepts like "rugged landscapes" and "local optima". In the last lecture, we'll see the awesome power of recombination and how it contributes to growth. The readings for this chapters consist on an excerpt from my book The Difference courtesy of Princeton University Press.

WEEK 6
Midterm Exam

WEEK 7
Lyapunov Functions & Coordination and Culture
Models can help us to determine the nature of outcomes produced by a system: will the system produce an equilibrium, a cycle, randomness, or complexity? In this set of lectures, we cover Lyapunov Functions. These are a technique that will enable us to identify many systems that go to equilibrium. In addition, they enable us to put bounds on how quickly the equilibrium will be attained. In this set of lectures, we learn the formal definition of Lyapunov Functions and see how to apply them in a variety of settings. We also see where they don't apply and even study a problem where no one knows whether or not the system goes to equilibrium or not.

WEEK 8
Path Dependence & Networks
In this set of lectures, we cover path dependence. We do so using some very simple urn models. The most famous of which is the Polya Process. These models are very simple but they enable us to unpack the logic of what makes a process path dependent. We also relate path dependence to increasing returns and to tipping points. The reading for this lecture is a paper that I wrote that is published in the Quarterly Journal of Political Science

WEEK 9
Randomness and Random Walks & Colonel Blotto
In this section, we first discuss randomness and its various sources. We then discuss how performance can depend on skill and luck, where luck is modeled as randomness. We then learn a basic random walk model, which we apply to the Efficient Market Hypothesis, the ideas that market prices contain all relevant information so that what's left is randomness. We conclude by discussing finite memory random walk model that can be used to model competition. The reading for this section is a paper on distinguishing skill from luck by Michael Mauboussin.

WEEK 10
Prisoners' Dilemma and Collective Action & Mechanism Design
In this section, we cover the Prisoners' Dilemma, Collective Action Problems and Common Pool Resource Problems. We begin by discussion the Prisoners' Dilemma and showing how individual incentives can produce undesirable social outcomes. We then cover seven ways to produce cooperation. Five of these will be covered in the paper by Nowak and Sigmund listed below. We conclude by talking about collective action and common pool resource problems and how they require deep careful thinking to solve. There's a wonderful piece to read on this by the Nobel Prize winner Elinor Ostrom.

WEEK 11
Learning Models: Replicator Dynamics & Prediction and the Many Model Thinker
In this section, we cover replicator dynamics and Fisher's fundamental theorem. Replicator dynamics have been used to explain learning as well as evolution. Fisher's theorem demonstrates how the rate of adaptation increases with the amount of variation. We conclude by describing how to make sense of both Fisher's theorem and our results on six sigma and variation reduction. The readings for this section are very short. The second reading on Fisher's theorem is rather technical. Both are excerpts from Diversity and Complexity.

WEEK 12
Final Exam

Go to Class
MOOC List is learner-supported. When you buy through links on our site, we may earn an affiliate commission.

Related Courses

The Factors that Influence the Effectiveness of Boards and the Governance Process (Coursera) Coursera
University at Buffalo,The State University of New York

The Factors that Influence the Effectiveness of Boards and the Governance Process (Coursera)

The third course in this Specialization introduces you to the factors that influence how effective boards of directors will be in carrying out their roles and responsibilities and hence the impact they have in shaping the success of the organization they govern. While this course has been developed with North American culture in mind, we do appreciate that, in other parts of the world, the nature of the factors that influence the effectiveness of nonprofit boards of directors may vary. Nevertheless,it is our hope that much of the course content will still be of value to those in other parts of the world.

Sep 14th 2026
5-12 Weeks
Practical Machine Learning on H2O (Coursera) Coursera
H2O.ai

Practical Machine Learning on H2O (Coursera)

In this course, we will learn all the core techniques needed to make effective use of H2O. Even if you have no prior experience of machine learning, even if your math is weak, by the end of this course you will be able to make machine learning models using a variety of algorithms. We will be using linear models, random forest, GBMs and of course deep learning, as well as some unsupervised learning algorithms.

Sep 14th 2026
5-12 Weeks
The Marketing Plan (Coursera) Coursera
IE Business School

The Marketing Plan (Coursera)

Create your own Marketing Plan for your own product or service idea. In this course you will learn how to produce arguably the most important marketing tool for any business. Rather than simply learning the stages of The Marketing Plan, you will be asked each week to complete a peer graded assignment which will help you complete a simplified version of the plan.

Sep 14th 2026
4 Weeks
Business English: Finance and Economics (Coursera) Coursera
Arizona State University

Business English: Finance and Economics (Coursera)

Do you work in finance or interact with finance professionals? Is it necessary to speak, write or understand English in your career? Follow the authentic characters in this course as they work through common business situations in finance and economics. Learn from your successes and failure, and think critically about your own communication options.

Sep 14th 2026
5-12 Weeks
Chinese Politics Part 1 - China and Political Science (Coursera) Coursera
The Hong Kong University of Science and Technology - HKUST

Chinese Politics Part 1 - China and Political Science (Coursera)

This course offers a conceptual framework for understanding China that highlights the intersection of politics and economics. It shows that rather than develop into a full blown market economy, state and party officials at all levels of the political system maintain significant influence in economic development. Such a “political” economy has had both positive and negative outcomes, which we will assess in detail.

Sep 14th 2026
5-12 Weeks
Infonomics II: Business Information Management and Measurement (Coursera) Coursera
University of Illinois at Urbana-Champaign

Infonomics II: Business Information Management and Measurement (Coursera)

Even decades into the Information Age, accounting practices yet fail to recognize the financial value of information. Moreover, traditional asset management practices fail to recognize information as an asset to be managed with earnest discipline. This has led to a business culture of complacence, and the inability for most organizations to fully leverage available information assets. This second course in the two-part Infonomics series explores how and why to adapt well-honed asset management principles and practices to information, and how to apply accepted and new valuation models to gauge information’s potential and realized economic benefits.

Sep 14th 2026
4 Weeks
How to Validate your Startup Idea (Coursera) Coursera
UNSW Sydney - University of New South Wales

How to Validate your Startup Idea (Coursera)

Starting a new business begins with an idea that needs to evolve through experimentation, iteration and interactions with people. This course is for existing and potential entrepreneurs who are looking for guidance and support to make their ‘great idea’ a reality. In addition to reviewing the basic principles of entrepreneurship, this course guides you through the process of actively validating your idea in the market.

Sep 14th 2026
5-12 Weeks
Investment Management in an Evolving and Volatile World by HEC Paris and AXA Investment Managers (Coursera) Coursera
HEC Paris

Investment Management in an Evolving and Volatile World by HEC Paris and AXA Investment Managers (Coursera)

Have you ever wanted to invest in financial markets, but were always afraid that you didn’t have the proper tools or knowledge to make informed decisions? Have you ever wondered how investment management companies operate and what fund managers do? AXA Investment Managers, in partnership with HEC Paris, will introduce you to the most important ideas and concepts in investment management, to help you better understand your financial future.

Sep 14th 2026
4 Weeks
Estadística aplicada a los negocios (Coursera) Coursera
Universidad Austral

Estadística aplicada a los negocios (Coursera)

La toma de decisiones está en la esencia de los negocios. Gerenciar es tomar decisiones, muchas veces bajo presión, con información desordenada y en un contexto de incertidumbre. Un aspecto básico es entender y analizar la información, organizar los datos de forma de facilitar su posterior uso y la toma de decisiones.

Sep 14th 2026
4 Weeks
Subsistence Marketplaces (Coursera) Coursera
University of Illinois at Urbana-Champaign

Subsistence Marketplaces (Coursera)

The foundation for this course lies with unique synergies between pioneering research, teaching, and social initiatives through the Subsistence Marketplaces Initiative. Unique to this approach is a bottom-up understanding of the intersection of poverty and the marketplace. The goals of this course are to help you develop an understanding of marketplace activity in the radically different context of subsistence where much of humanity resides and survives, and for you to design solutions that can be implemented by individuals, businesses, and social enterprises through economically, ecologically, and socially sustainable products for subsistence marketplaces.

Sep 14th 2026
5-12 Weeks