Understanding biases will help you unpack why ordinary people can fall into extreme behaviors. At the end of this article, we’ll analyze how cults are so insidiously effective at converting new believers.

How This List of Cognitive Biases Works

For each of Charlie Munger’s 25 cognitive biases, I explain these bullet points:

AKA
- Charlie Munger often groups some cognitive biases under a single umbrella term. I list the formal psychological names for related biases you may have heard of.
What it is
- How this bias changes your decision making
Why it evolved
- Why the bias might have arisen during human evolution
How it can be harmful
- How this bias leads to poor decisions or how it can be exploited to change your behavior
Examples
- Examples of the bias at work
Antidotes
- Actionables on how to avoid the bad behavior

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Charlie’s Reason for Interest in Psychology

In Poor Charlie’s Almanack, Charlie Munger explains why humans are just advanced animals, and why we’re so psychologically flawed, leading to these 25 cognitive biases.

Man is a “’social animal,’ greatly and automatically influenced by behavior he observed in men around him. I also knew that man lived, like barnyard animals and monkeys, in limited size dominance hierarchies, wherein he tended to respect authority and to like and cooperate with his own hierarchy members while displaying considerable distrust and dislike for competing men not in his own hierarchy.”
“Extreme success of the ants also fascinated me— how a few behavioral algorithms caused such extreme evolutionary success grounded in extremes of cooperation within the breeding colony and, almost always, extremes of lethal hostility toward ants outside the breeding colony, even ants of the same species.”
“The limitations inherent in evolution’s development of the nervous-system cells that control behavior arc beautifully demonstrated by these insects, which often have a mere 100,000 or so cells in their entire nervous systems, compared to man’s multiple billions of cells in his brain alone.” “In the ant’s case, the behavioral algorithms are few in number and almost entirely genetic in origin. The ant learns a little behavior from experiences, but mostly it merely responds to ten or so stimuli with a few simple responses programmed into its nervous system by its genes.”
“It seems obvious, to me at least, that the human brain must often operate counterproductively just like the ant’s, from unavoidable oversimplicity in its mental process.”
“Man is easily fooled, either by the cleverly thought out manipulation of man, by circumstances occurring by accident, or by very effective manipulation practices that man has stumbled into during “practice evolution” and kept in place because they work so well.”
Put one hand in hot water, one in cold water, then put both in the same temperature warm water. “Now one hand feels as if it has just been put in cold water and the other hand feels as if it has just been placed in hot water. When one thus sees perception so easily fooled by mere contrast, where a simple temperature gauge would make no error, and realizes that cognition mimics perception in being misled by mere contrast, he is well on the way toward understanding, not only how magicians fool one, but also how life will fool one.”