A speech and Q&A with billionaire Charlie Munger. In this speech at Harvard, know as The Psychology of Human Misjudgment, Charlie discusses his 24 rules for avoiding human misjudgement. Later Charlie takes questions from those in the crowd.
0:26 Start of speech
2:40 24 Standard causes of human misjudgment
2:55 1.Under-recognition of the power of incentives
6:09 2.Psychological denial
6:57 3.Incentive cause bias
10:18 4.Bias from consistency and commitment tendency
10:52 5.Incremental brainwashing
12:31 6.Misconstruing past correlation as basis for current decision-making
14:00 (Bonus).Persian Messenger Syndrome
19:51 7. Bias from reciprocation tendency
23:04 8.Bias from over-influence of social proof in uncertain conditions (Lemming effect)
26:23 9.Bias from contrast caused distortions of sensation, perception and cognition
27:57 10.Cognition mimics sensation
30:15 11. Milgram's Bias through dominant authority
31:51 12.Bias from Deprival super-reaction syndrome (bias against perceived dispossession)
35:00 13.Bias from envy jealousy
35:51 14.Bias from chemical dependency
36:16 15.Bias from Misgambling compulsion
38:37 16.Bias from liking distortion (confirmation)
42:20 17.Bias from the non-mathematical nature of the human brain
43:20 18.Availability changes cognition
45:10 19.What's vivid (contrast) causes unavailability then envy
49:48 20. Bias from Over influence of extra vivid evidence
50:50 21. Reasoning by "Arraying facts on theory structures answering the question why"
53:13 22.Skips it
53:17 23.Stress induced mental changes
54:29 24.“Say something” syndrome
55:34 What happens when these standard psychological tendencies combine?
1:01:00 Isn’t this list of standard psychological tendencies improperly tautological compared with the system of Euclid?
1:01:15 What good, in the practical world, is the thought system indicated by the list?
1:07:30 What special knowledge problems lie buried in the thought system indicated by the list?
1:11:12 If the thought system indicated by this list of psychological tendencies has great value not recognized and employed, what should the educational system do about it?
1:12:11 Start of Q&A
1:12:17 Will we be able to get a copy of that list of 24 [standard causes of human misjudgment]?
1:12:43 Relating principles to past decisions?
1:14:27 Out of those 24, could you tell us the one rule that’s most important?
Interview Date: June 1995
Event: Harvard University
Original Image Source:http://bit.ly/CMunger