The Psychology of Human Misjudgment

The audio below contains the often referred to speech by Charlie Munger on the psychology of human misjudgment given to an audience at Harvard University back in 1995. In his speech, Charlie talks about some of the different kinds of human misjudgments that he has encountered through his life.

The following is a summary of Charlie’s 25 standard causes of human misjudgments, revised in 2005 and included in Poor Charlie’s Almanack – The Wit and Wisdom of Charles T. Munger:

  1. Reward and Punishment Superresponse Tendency
  2. Liking/Loving Tendency
  3. Disliking/Hating Tendency
  4. Doubt-Avoidance Tendency
  5. Inconsistency-Avoidance Tendency
  6. Curiosity Tendency
  7. Kantian Fairness Tendency
  8. Envy/Jealousy Tendency
  9. Reciprocation Tendency
  10. Influence-from-Mere Association Tendency
  11. Simple, Pain-Avoiding Psychological Denial
  12. Excessive Self-Regard Tendency
  13. Overoptimism Tendency
  14. Deprival Superreaction Tendency
  15. Social-Proof Tendency
  16. Contrast-Misreaction Tendency
  17. Stress-Influence Tendency
  18. Availability-Misweighing Tendency
  19. Use-It-or-Lose-It Tendency
  20. Drug-Misinfluence Tendency
  21. Senescence-Misinfluence Tendency
  22. Authority-Misinfluence Tendency
  23. Twaddle Tendency
  24. Reason-Respecting Tendency
  25. Lollapalooza Tendency – The Tendency to Get Extreme Confluences of Psychological Tendencies Acting in Favor of a Particular Outcome

 

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