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

Introduction to circuits and Ohm's law | Circuits | Physics | Khan Academy

See the 1,000-Year-Old Windmills Still in Use Today | National Geographic

View All

Student tips for using Mastery Goals on Khan Academy

Hello and welcome to our video on Mastery goals! Let’s review a few tips to ensure you are making the most out of your learning experience while working on Khan Academy. First, let’s make sure you’re logged into your Khan Academy account by checking for …

2015 AP Chemistry free response 1e | Chemistry | Khan Academy

The only common oxide of zinc has a formula ZnO, zinc, and then you have your oxygen. Write the electron configuration for a zinc atom in the ground state. So, there’s a couple of ways that you could do this for the electron configuration. Let’s first id…

Business cycles and the production possibilities curve | APⓇ Macroeconomics | Khan Academy

What we have here are two different visualizations of a country’s output at different points in time. You might recognize that here on the left, we have a production possibilities curve for this country. It’s a very simple country that either produces for…

The Technical Challenges of Measuring Gravitational Waves - Rana Adhikari of LIGO

So maybe, yeah, maybe we should just start out explaining like what is LIGO. LIGO is a huge project aimed at being able to take the bending of space that we think is happening all the time and turn it into some kind of signal that we can use and measure. …

Early English settlements - Jamestown

In the last video, we talked about the short-lived and highly unsuccessful English colony at Roanoke Island, which disappeared pretty much without a trace and even today is still known as the Lost Colony. So, as late as 1585, England had still not succes…

DONALD TRUMP'S FULL SPEECH | Trump claims victory, addresses supporters in Florida

Thank you very much. Wow! Well, I want to thank you all very much. This is great. These are our friends. We have thousands of friends on this incredible movement. This was a movement like nobody’s ever seen before, and frankly, this was, I believe, the gr…

Charlie Munger: 24 Standard Causes of Human Misjudgment

More Articles