My own wording of Charlie Munger’s Psychology of Human Misjudgment.
Because putting it in my own words will help me to remember them. I'm not sure what the "official" 24 Standard Causes were on the handout referred to in the transcript.
Tom’s 24 Standard Causes of Irrational Behavior
- "This is how I get paid" People
behave irrationally when there’s an incentive or reward system
- "I'm on her side." People behave irrationally because they under-recognize the power of incentives to create bias in their own rationality or in the mind of people advising them. Easy to forget "whose bread I eat, their song I sing."
- "I can't believe that." People behave irrationally because of psychological denial
- "This is what I agreed to before." People behave irrationally because of consistency and commitment bias. It leads to people shutting out new ideas/actions that contradict their earlier conclusions or commitments. This leads to confirmation bias.
- "That's too hard." "I like this." People behave irrationally when there’s Pavlovian reinforcement, or even if they have insufficient information because of some positive or negative associations
- "You've done something for me." People behave irrationally when they feel the need to reciprocate, including when someone asks for a lot, and then backs off, you feel a need to reciprocate in kind.
- "This is how I'm supposed to behave." People behave irrationally when they feel like they need to fulfill a role, and act as others expect
- "This is what the winners do." People behave irrationally because of over-influence by social proof, what others are doing, especially under conditions of uncertainty and stress
- "I remember what supports my theory." People behave irrationally when they have a couple models of how the world works, and then apply everything to that model. "To the man with a hammer, every problem looks like a nail." Better to have lots of tools in the toolbox. This leads to confirmation bias.
- "Compared to what I've seen, this is good." People behave irrationally when contrast-caused distortions of perception or cognition. When we measure things simply by comparing them to other things we know about.
- "Yes, sir." People behave irrationally when over-influenced by authority.
- "Don't take that from me!" People behave irrationally when threatened with scarcity, including threatened removal of something almost possessed, but never possessed.
- "I want what you have." People behave irrationally when envious or jealous. Especially on a subconscious level.
- "Thatsh the besht thing evarr." People behave irrationally when chemically dependent
- "I'm feeling lucky!" People behave irrationally from a gambling compulsion when the rewards are variable.
- "Those elites may not like it, but I'm gonna do it anyways." People behave irrationally when liking or disliking distorts their thinking. This not only include people we like or dislike, but also our own kind, and our own ideas.
- "I figure it's 50-50." People behave irrationally because the human brain is non-mathematical in nature, and we tend to use crude heuristics rather than probabilities and properly weighing available information. For example, we tend to overweigh conveniently available information, or the items on this list can make us forget the importance of consequences
- "I feel sorry for him." People behave irrationally because of emotions, and because of appeals to emotions may lead us to forget the bigger picture
- "Yikes! That's incredible!" People behave irrationally because we can be overly influenced by extra-vivid evidence.
- "Yeah, cuz uh-huh." People behave irrationally because they get mentally confused by not having thought out the answer to “Why?” Or, they get information that apparently, but not really answers the question “Why?”
- "I can't remember everything." People behave irrationally because of normal limitations of sensation, memory, cognition and knowledge
- "Aaargh! I need relief!" People behave irrationally because of stress-induced mental changes, small and large, temporary and permanent.
- "Use it or lose it." People behave irrationally because of common mental illnesses and mental declines, temporary and permanent, including the tendency to lose ability through disuse.
- "Well, to be honest, I think we should meet up again and talk about it further." People behave irrationally in organizations because of say-something syndrome when people are incoherent and can’t handle what they need to communicate.
When several of these causes are going on at once, then it really screws with our thinking.