Charlie Munger: 24 Standard Causes of Human Misjudgment

2m read

·Nov 7, 2024

Well, I am very interested in the subject of human misjudgment, and Lord knows I've created my well, a good bit of it. I don't think I've created my full statistical share, and I think that one of the reasons was that I tried to do something about this terrible ignorance I left the Harvard Law School with. When I saw this patterned irrationality, which was so extreme, I had no theory or anything to deal with it, but I could see that it was extreme and I could see that it was patterned. I just started to create my own system of psychology, partly by casual reading, but largely from personal experience.

I used that pattern to help me get through life. Fairly late in life, I stumbled into this book influenced by a psychologist named Bob Cialdini, who became a super tenured hotshot on a two-thousand-person faculty at a very young age. He wrote this book which has now sold 300,000 copies, which is remarkable for, semi, well, it's an academic book aimed at a popular audience. That filled in a lot of holes in my crude system, and when those holes had filled in, I thought I had a system that was a good working tool, and I'd like to share that one with you.

I came here because behavioral economics—how could economics not be behavioral? If it isn't behavioral, what the hell is it? I think it's fairly clear that all reality has to respect all other reality. If you come to inconsistencies, they have to be resolved. So the idea of, if there's anything valid in psychology, economics has to recognize it, and vice versa. I think the people that are working on this fringe between economics and psychology are absolutely right to be there, and I think there's been plenty wrong over the years.

Well, let me romp through as much of this list as I have time to get through: 24 standard causes of human misjudgment. First: under-recognition of the power of what psychologists call reinforcement and economists call incentives. Well, you say everybody knows that. Well, I think I've been in the top five

Justification with the mean value theorem: table | AP Calculus AB | Khan Academy

Inflection points from graphs of function & derivatives | AP Calculus AB | Khan Academy

View All

Night Time in the City From a Bugs POV | A Real Bug's Life | National Geographic

When the night shift begins, it’s time for those hustlers and stalkers to come out and play. Gotta find a safe place to sleep. Good thing he always carries a silk sleeping bag. Just find a place to sling it up, and he’s snug as a bug in a— Oh, come on, m…

Introduction to vitamins and minerals | Biology foundations | High school biology | Khan Academy

We’ve been told throughout our lives to eat certain foods because they contain vitamins, or sometimes people might say they also contain some minerals that you need. So the obvious question is, well, what are vitamins and what are these minerals that fol…

The Emirate of Nejd and the Kingdom of Saudi Arabia

Where we left off in the last video, the first Saudi state, the Emirate of Thyria, was ended in the Ottoman-Wahhabi War. It was ended by the Ottomans, but it was by actual Egyptian forces that retook control of Mecca and Medina, and then laid siege to the…

The History of Vlad the Impaler | Atlas of Cursed Places

MAN: Transylvania, the name conjures it all—dense pine, impassable, craggy cliffs, thick ground fog. This is the mythic forest of your childhood nightmare. Bran Castle, billed as the last standing relic of a man some call Dracula. The story goes that Roma…

Invertible matrices and determinants | Matrices | Precalculus | Khan Academy

So let’s dig a little bit more into matrices and their inverses, and in particular, I’m going to explore the situations in which there might not be an inverse for a matrix. So just as a review, we think about if we have some matrix A, is there some other…

Zubrin's Guide to Colonizing Mars | MARS

Humans to Mars does not require building some gigantic nuclear powered interplanetary spaceship. We can do it with the kinds of technology we either have today or know how to build today. We need to have a heavy lift booster. We take two such boosters fo…

Charlie Munger: 24 Standard Causes of Human Misjudgment

More Articles