第164页 Talk Two: A Lesson on Elementary, Worldly Wisdom as It Relates to Investment Management and Business

Model One: Decision Trees and the elementary math of permutation and combinations

Model Two: Accounting. Charlie Munger's favorite story about the limitation of accounting is concerned with Carl Braun who devised his own system of accounting to handle the process

Side One: 
Braun's rule for all the Braun Company's communications was called the five Ws - you had to tell who was going to do what, where , when, and why. And if you wrote a letter or directive in the Braun Company telling somebody to do something, and you didn't tell him WHY, you could get fired
.

Model Three: 
The engineering idea of breakpoints - that's a very powerful model, too. The notion of a critical mass - that comes out of physics - is a very powerful model. 
- cost-benefit analysis

Model Four: The psychology of misjudgement

Model Five: Microeconomics and the concept of advantages of scale
Specialization, cost reduction, experience curve, the simple geometry (increase in surface versus increase in volume), the informational advantage with branding, "social proof",cascade to winner-take-all situation. But it leads to big, dumb bureaucracy. 
Life is an everlasting battle between those two forces - to get these advantages of scale on one side and a tendency to get a lot like the U.S. Agriculture Department on the other side - where they just sit around and so forth.
patent, trademark, exclusive franchise
The great lesson in microeconomics is to discriminate between when technology is going to help you and when it's going to kill you. They don't do the second step of the analysis in the face of implementing great technology improvements- which is to determine how much is going to stay home and how much is going to flow through to the customer.