List of key bias per Munger:
Where a “cognitive bias is a systematic pattern of deviation from norm or rationality in judgment. Individuals create their own “subjective reality” from their perception of the input”
Video of full speech: 1hr16m (Youtube)
Transcript (www.fs.blog)
- Under recognition of incentives (reinforcement)
- Psychological denial
- Incentive-cause bias, “agency costs”
- Bias from consistency and commitment tendency
- Bias from Pavlovian association
- Bias from reciprocation tendency
- “What you do will change what you think”
- Bias from over influence of social proof
- Elegant math
- ”Better to be roughly right than precisely wrong” – John Maynard Keynes
- Bias from contrast caused distortions of sensation, perception and cognition
- ”Cognition mimics sensation”
- Bias from over-influence by authority
- Bias from deprival, super-reaction syndrome – including threatened removal of something almost possessed
- Bias from envy/jealousy
- “It’s not greed that drives the world but envy” – Warren Buffet
- Bias from chemical dependency
- “The tendency to distort reality so that it’s endurable”
- Bias from mis-gambling compulsion
- Bias from liking distortion (reciprocal: disliking distortion)
- Bias from non-mathematical nature of the human brain… tendency to overweigh conveniently available information
- ”All the things on this list distort judgement”
- Bias from over-influence by vivid evidence
- Mental confusion caused by information not arrayed in the mind and theory structures, creating sound generalizations developed in response to the question “Why”
- “If you want to persuade someone tell them the “Why”
- Normal limitations of sensation, memory, cognition and knowledge
- Stress-induced mental changes
- Mental illness and decline
- Organizational confusion from say-something syndrome
- “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” Blaise Pascal
One Reply to “Charlie Munger: 24 (22) causes of human misjudgment”