Critical Thinking

Munger's 25 Tendencies

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tagsmoc, cognitive-bias

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Munger’s 25 Tendencies

Source: Charlie Munger, The Psychology of Human Misjudgment (1995 speech; collected in Poor Charlie’s Almanack).

Munger’s catalog of 25 standard causes of human misjudgment — the psychological tendencies that, singly and especially in combination, drive people to irrational decisions. This page is a hub: tendencies that already have (or now have) their own atomic note are linked; the rest are summarized inline.

The most important: tendencies rarely act alone. When several push the same way, you get the Lollapalooza effect (#25).

The 25 Tendencies

  1. Reward and Punishment Superresponse — People respond powerfully to incentives, often rationalizing bad conduct to get the reward. → Incentives
  2. Loving — We ignore faults in, and comply with, people and things we like or love.
  3. Hating — We ignore virtues in, and distort facts against, what we dislike.
  4. Doubt-Avoidance — The mind rushes to remove doubt, especially under puzzlement and stress.
  5. Inconsistency-Avoidance — We resist changing established conclusions, habits, and commitments.
  6. Curiosity — A constructive tendency; curiosity counteracts the others and yields wisdom and pleasure.
  7. Kantian Fairness — We expect and extend the fair-reciprocal behavior that would work if everyone adopted it.
  8. Jealousy — Resentment of those with more distorts judgment; rarely admitted openly.
  9. Reciprocation — We automatically repay favors and disfavors — a lever for manipulation.
  10. Influence from Mere Association — We misjudge by association with past pleasure/pain or liked/disliked things (and stereotyping).
  11. Simple, Pain-Avoiding Psychological Denial — When reality is too painful, we distort it to bear it. → Denial
  12. Excessive Self-Regard — We overrate ourselves and our possessions (endowment effect). → Overconfidence
  13. Overoptimism — We are excessively optimistic even absent any threat. → Overconfidence, Wishful Thinking
  14. Deprival-Superreaction — Losses and near-misses hurt far more than equivalent gains please (loss aversion).
  15. Social Proof — We think and act as those around us do, especially under stress.
  16. Contrast-Misreaction — We judge by contrast with what came before, not by absolute value.
  17. Stress-Influence — Light stress sharpens performance; heavy stress causes dysfunction and acute pessimism.
  18. Availability-Misweighing — We overweigh vivid, easily recalled information. → Availability Bias
  19. Use-It-or-Lose-It — Skills deteriorate with disuse; practice slows the loss and speeds recovery.
  20. Drug-Misinfluence — Chemical dependence destroys cognition and judgment (an extension of denial, #11).
  21. Senescence-Misinfluence — Cognitive decay with age; continual joyful learning delays but cannot prevent it.
  22. Authority-Misinfluence — We defer to leaders automatically, even when they are wrong.
  23. Twaddle — Gifted talkers produce volumes of meaningless chatter that crowds out serious work.
  24. Reason-Respecting — We comply and learn far better when given reasons — so much so that even bad reasons boost compliance.
  25. Lollapalooza — Extreme outcomes when several tendencies combine and reinforce one another in the same direction.

How to Use This

  • Munger’s prescription: build the tendencies into a mental checklist and run decisions against it, looking especially for stacked tendencies (#25).
  • Several of these map onto biases already in the vault — see the links above and the Cognitive Biases MOC.

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