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

See Why Jumping in a Pool Saved This Blind Woman's Life | Short Film Showcase

True Signs You're a Winner or LOSER | Kevin O'Leary

View All

The Illegal and Secretive World of Chameleon Ranching | National Geographic

Chameleons have a lot of crazy things going on and are pretty unique in the lizard world. They have these independently rotating googly eyes, this prehensile tail which is basically a monkey tail they can use like a fifth limb, and spring-loaded tongs tha…

Analyzing structure with linear inequalities: balls | High School Math | Khan Academy

A bag has more green balls than blue balls, and there is at least one blue ball. Let B represent the number of blue balls, and let G represent the number of green balls. Let’s compare the expressions 2B and B + G. Which statement is correct? So, they mak…

Alaskan Timelapse - Behind the Scenes | Life Below Zero

Campers aren’t working; that’s getting super frustrating. This is what it’s like on life below zero. Cameras are already down, tough conditions all around— a fill-in: no heat, no power, no anything. Oh, won’t even turn it on. Too many times we have bad wi…

Shower Thoughts: Space Is Weird

The universe is a mind-boggling place. Actually, I’m not even sure I can call it a place. NASA says the universe is everything, but what they really mean is that it contains everything— all of space, energy, time, and matter, like you and me. But there’s …

Estimating a P-value from a simulation | AP Statistics | Khan Academy

So we have a question here on p-values. It says Evie read an article that said six percent of teenagers were vegetarians, but she thinks it’s higher for students at her school. To test her theory, Evie took a random sample of 25 students at her school, an…

Confucius | The Art of Becoming Better (Self-Cultivation)

Isn’t it the case we should always stay true to ourselves? Which means that we ought to know who we are and organize our lives in ways that are compatible with our personalities? When we look for a partner, for example, we look for someone that we’re comp…

Charlie Munger: 24 Standard Causes of Human Misjudgment

More Articles