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25 Psychological Biases: Part 1
Our brains, like much of our bodies, are biologically optimized to deliver results with efficiency. The brain often employs shortcuts to make decision making easier and faster. Often these shortcuts are well-serving, like when your eyes detect the shape of a predator in the bushes before you consciously perceive it. But often these shortcuts also obscure the truth and lead to dysfunctional thinking. Even worse, people can take advantage of these shortcuts and manipulate you.
Charlie Munger mastered his understanding of these shortcuts. Through his reading in psychology and his real-world experiences, he assembled 25 psychological tendencies that tend to mislead humans.
(Shortform note: What Munger calls “tendencies” are also commonly known as “cognitive biases.” You can read more about biases in our book guides to Influence by Robert Cialdini and Thinking, Fast and Slow by Daniel Kahneman.)
One warning: simply being aware of these biases is not an adequate defense against them. For important decisions, Munger runs through a full checklist covering all of these biases, crossing each one off to make sure he’s not affected by the bias.
For each tendency, we’ll cover:
(Shortform note: In his original speech, Munger treated the biases unevenly, so we’ve filled in the gaps with examples from his other material and from general psychological research.)
Also known as: incentive-caused bias, agency cost