Munger's 25 standard causes of human misjudgment
Charlie Munger's checklist from his 1995 talk "The Psychology of Human Misjudgment" (reprinted in Poor Charlie's Almanack). He argued that these tendencies are individually useful but together lead us astray, especially when several act at once (the "lollapalooza" effect). Where Munger's tendency is the same as a widely used bias, it shares one page with it.
Source: fs.blog · 25 items in the source's own order.
- 1Reward and punishment superresponse tendency
→ Incentive super-response tendency
People respond to rewards and punishments far more strongly and creatively than expected, often by gaming the metric rather than serving its purpose.
- 2Liking/loving tendency
→ Liking bias
Being more easily persuaded by, and more generous to, people we like, who are attractive, similar to us or flatter us.
- 3Disliking/hating tendency
Munger's counterpart to liking: a tendency to dislike people, groups or ideas that threaten our own, distorting facts in the process.
- 4Doubt-avoidance tendency
The mind's urge to remove doubt by reaching a quick decision, especially under stress, which makes us jump to an answer rather than wait for evidence.
- 5Inconsistency-avoidance tendency
Munger's term for the mind's reluctance to change, which keeps old conclusions, habits and identities in place even when they should change.
- 6Curiosity tendency
Munger counts curiosity among the helpful tendencies: when cultivated, it counters other biases by driving us to learn what is true.
- 7Kantian fairness tendency
Munger's term for the expectation that everyone follows the same rules of fair play, shown by people who share a limited resource equally and by outrage when someone cuts in.
- 8Envy/jealousy tendency
→ Envy
Resentment at others' advantages, which makes us judge by comparison and sometimes harm our own interests to reduce theirs.
- 9Reciprocation tendency
→ Reciprocity
Feeling obliged to return favours, gifts and concessions, even small or unrequested ones.
- 10Influence-from-mere-association tendency
→ Association bias
Linking things that merely occur together or resemble each other, so we like or dislike something because of what it is associated with.
- 11Simple, pain-avoiding psychological denial
Munger's term for distorting reality when facing it would be too painful.
- 12Excessive self-regard tendency
Munger's name for over-rating ourselves, our possessions, our children and our decisions, and so being too slow to see our own faults.
- 13Overoptimism tendency
→ Optimism bias
Expecting good outcomes to be more likely, and bad ones less likely, for ourselves than for others.
- 14Deprival-superreaction tendency
→ Loss aversion
Feeling a loss roughly twice as strongly as an equal gain, which makes us cling to what we have and avoid risk when ahead.
- 15Social-proof tendency
→ Social proof
Deciding what is correct or appropriate by looking at what others do, especially similar others, when we are uncertain.
- 16Contrast-misreaction tendency
→ Contrast effect
Judging something by comparison with what was just seen rather than on its own merits.
- 17Stress-influence tendency
Mild stress can sharpen performance, but extreme stress degrades judgment and can produce rigid or extreme reactions.
- 18Availability-misweighing tendency
→ Availability heuristic
Judging how likely or frequent something is by how easily examples come to mind, so vivid, recent or emotional events get overweighted.
- 19Use-it-or-lose-it tendency
Skills and knowledge fade unless practised, and fluency needs constant use.
- 20Drug-misinfluence tendency
Alcohol and other drugs, including addiction, distort judgment and behaviour, often while we feel fine.
- 21Senescence-misinfluence tendency
Ageing can reduce cognitive speed and flexibility, though the decline varies and can be slowed by keeping the mind active.
- 22Authority-misinfluence tendency
→ Authority bias
Giving undue weight to the opinion or commands of an authority figure, in matters even outside their expertise.
- 23Twaddle tendency
Filling one's mind and conversation with trivia, noise and empty talk that crowds out what matters.
- 24Reason-respecting tendency
Munger's name for our habit of complying with, and giving, reasons, even poor ones: people want to know why, and any reason feels like enough.
- 25Lollapalooza tendency
→ Lollapalooza effect
Munger's term for the extreme outcomes that arise when several psychological tendencies push in the same direction at once.