hypotheticals-counterfactuals

What this skill does

# Hypotheticals and Counterfactuals

## Table of Contents
- [Workflow](#workflow)
- [Common Patterns](#common-patterns)
- [Guardrails](#guardrails)
- [Quick Reference](#quick-reference)

## Workflow

Copy this checklist and track your progress:

```
Hypotheticals & Counterfactuals Progress:
- [ ] Step 1: Define the focal question
- [ ] Step 2: Generate counterfactuals or scenarios
- [ ] Step 3: Develop each scenario
- [ ] Step 4: Identify implications and insights
- [ ] Step 5: Extract actions or decisions
- [ ] Step 6: Monitor and update
```

**Step 1: Define the focal question**

What are you exploring? Past decision (counterfactual)? Future possibility (hypothetical)? Assumption to test? See [resources/template.md](resources/template.md#focal-question-template).

**Step 2: Generate counterfactuals or scenarios**

Counterfactual: Change one key factor, ask "what would have happened?" Hypothetical: Imagine future scenarios (2-4 plausible alternatives). See [resources/template.md](resources/template.md#scenario-generation-template) and [resources/methodology.md](resources/methodology.md#1-counterfactual-reasoning).

**Step 3: Develop each scenario**

Describe what's different, trace implications, identify key assumptions. Make it vivid and concrete. See [resources/template.md](resources/template.md#scenario-development-template) and [resources/methodology.md](resources/methodology.md#2-scenario-planning-techniques).

**Step 4: Identify implications and insights**

What does each scenario teach? What assumptions are tested? What risks revealed? See [resources/methodology.md](resources/methodology.md#3-extracting-insights-from-scenarios).

**Step 5: Extract actions or decisions**

What should we do differently based on these scenarios? Hedge against downside? Prepare for upside? See [resources/template.md](resources/template.md#action-extraction-template).

**Step 6: Monitor and update**

Track which scenario is unfolding. Update plans as reality diverges from expectations. See [resources/methodology.md](resources/methodology.md#4-monitoring-and-adaptation).

Validate using [resources/evaluators/rubric_hypotheticals_counterfactuals.json](resources/evaluators/rubric_hypotheticals_counterfactuals.json). **Minimum standard**: Average score ≥ 3.5.

## Common Patterns

**Pattern 1: Pre-Mortem (Prospective Hindsight)**
- **Format**: Imagine it's future date, project failed. List reasons why.
- **Best for**: Project planning, risk identification before launch
- **Process**: (1) Set future date, (2) Assume failure, (3) List causes, (4) Prioritize top 3-5 risks, (5) Mitigate now
- **When**: Before major launch, strategic decision, resource commitment
- **Output**: Risk list with mitigations

**Pattern 2: Counterfactual Causal Analysis**
- **Format**: "What would have happened if we had done X instead of Y?"
- **Best for**: Learning from past decisions, understanding what mattered
- **Process**: (1) Identify decision, (2) Imagine alternative, (3) Trace different outcome, (4) Identify causal factor
- **When**: Post-mortem, retrospective, learning from success/failure
- **Output**: Causal insight (X caused Y because...)

**Pattern 3: Three Scenarios (Optimistic, Baseline, Pessimistic)**
- **Format**: Describe best case, expected case, worst case futures
- **Best for**: Strategic planning, forecasting, resource allocation
- **Process**: (1) Define time horizon, (2) Describe three futures, (3) Assign probabilities, (4) Plan for each
- **When**: Annual planning, market uncertainty, investment decisions
- **Output**: Three detailed scenarios with implications

**Pattern 4: 2×2 Scenario Matrix**
- **Format**: Two key uncertainties create four quadrants (scenarios)
- **Best for**: Exploring interaction of two critical unknowns
- **Process**: (1) Identify two key uncertainties, (2) Define extremes, (3) Develop four scenarios, (4) Name each world
- **When**: Strategic planning with multiple drivers of uncertainty
- **Output**: Four distinct future worlds with narratives

**Pattern 5: Assumption Reversal**
- **Format**: "What if our key assumption is backwards?"
- **Best for**: Challenging mental models, unlocking innovation
- **Process**: (1) List key assumptions, (2) Reverse each, (3) Explore implications, (4) Identify if reversal plausible
- **When**: Stuck in conventional thinking, need breakthrough
- **Output**: New perspectives, potential pivots

**Pattern 6: Stress Test (Extreme Scenarios)**
- **Format**: Push key variables to extremes, test if decision holds
- **Best for**: Risk management, decision robustness testing
- **Process**: (1) Identify decision, (2) List key variables, (3) Set to extremes, (4) Check if decision still valid
- **When**: High-stakes decisions, need to ensure resilience
- **Output**: Decision validation or hedges needed

## Guardrails

**Key requirements:**

1. **Plausibility constraint**: Scenarios must be possible, not just imaginable. "What if gravity reversed?" is not useful counterfactual. Stay within bounds of plausibility given current knowledge.

2. **Minimal rewrite principle** (counterfactuals): Change as little as possible. "What if we had chosen Y instead of X?" not "What if we had chosen Y and market doubled and competitor failed?" Isolate causal factor.

3. **Avoid hindsight bias**: Pre-mortem assumes failure, but don't just list things that went wrong in similar past failures. Generate new failure modes specific to this context.

4. **Specify mechanism**: Don't just state outcome ("sales would be higher"), explain HOW ("sales would be higher because lower price → higher conversion → more customers despite lower margin").

5. **Assign probabilities** (scenarios): Don't treat all scenarios as equally likely. Estimate rough probabilities (e.g., 60% baseline, 25% pessimistic, 15% optimistic). Avoids equal-weight fallacy.

6. **Time horizon clarity**: Specify WHEN in future. "Product fails" is vague. "In 6 months, adoption <1000 users" is concrete. Enables tracking.

7. **Extract actions, not just stories**: Scenarios are useless without implications. Always end with "so what should we do?" Prepare, hedge, pivot, or double-down.

8. **Update scenarios**: Reality evolves. Quarterly review: which scenario is unfolding? Update probabilities and plans accordingly.

**Common pitfalls:**

- ❌ **Confusing counterfactual with fantasy**: "What if we had $100M funding from start?" vs. realistic "What if we had raised $2M seed instead of $1M?"
- ❌ **Too many scenarios**: 10 scenarios = analysis paralysis. Stick to 2-4 meaningful, distinct futures.
- ❌ **Scenarios too similar**: Three scenarios that differ only in magnitude (10% growth, 15% growth, 20% growth). Need qualitatively different worlds.
- ❌ **No causal mechanism**: "Sales would be 2× higher" without explaining why. Must specify how change leads to outcome.
- ❌ **Hindsight bias in pre-mortem**: Just listing past failures. Need to imagine new, context-specific risks.
- ❌ **Ignoring low-probability, high-impact**: "Black swan won't happen" until it does. Include tail risks.

## Quick Reference

**Counterfactual vs. Hypothetical:**

| Type | Direction | Question | Purpose | Example |
|------|-----------|----------|---------|---------|
| **Counterfactual** | Backward (past) | "What would have happened if...?" | Understand causality, learn from past | "What if we had launched in EU first?" |
| **Hypothetical** | Forward (future) | "What could happen if...?" | Explore futures, prepare for uncertainty | "What if competitor launches free tier?" |

**Scenario types:**

| Type | # Scenarios | Structure | Best For |
|------|-------------|-----------|----------|
| **Three scenarios** | 3 | Optimistic, Baseline, Pessimistic | General forecasting, strategic planning |
| **2×2 matrix** | 4 | Two uncertainties create quadrants | Exploring interaction of two drivers |
| **Cone of uncertainty** | Continuous | Range widens over time | Long-term planning (5-10 years) |
| **Pre-mortem** | 1 | Imagine fa