Charles T. Munger, Vice-Chairman of the incredibly successful Berkshire-Hathaway investment holdings company, did a speech on the common psychological misjudgments that many of us make. In my previous writings I have referred to the term cognitive bias quite a bit. Today I will list the 25 cognitive biases, or ways you brain tricks you into thinking. My hope is that noticing these will help you make less error in life and be able to make decisions logically. So without further ado, here are the 25 ways your brain plays tricks on you:
1. Reward and Punishment Response Tendency – This means that people respond highly to incentives, whether they are positive or negative. If you look closely at human behavior, the majority of it is incentivized. Munger says this is crucial in understanding what motivates human behavior.
2. Liking Tendency – We tend to respond to and listen to the ideas of people we like and because we like them we tend to ignore their faults.
3. Disliking Tendency – We tend to ignore that virtuous facts of people we dislike. We also distort the facts in order to fit our view of dislike for that individual.
4. Doubt/Avoidance Tendency – If we aren’t sure if a decision is the right one, we tend to make a hasty and ill-informed decision as a way of alleviating our doubt.
5. Inconsistency-Avoidance Tendency – We fear change, and our habits are hard wired to our brain. “You can’t teach an old dog new tricks”.
6. Curiosity tendency – The lack of curiosity and interest in learning, even though a continual learning process is highly beneficial. This is the idea that once school is done with the learning stops as well. This one stands out to me the most, and it’s actually quite tragic.
7. Kantian Fairness tendency – The inability to deal with the fact that life isn’t fair. I’m sure this one hits home for many of you. The fact of the matter is that the universe could care less about your feelings, and you must deal with it.
8. Envy/Jealousy Tendency – This one is fairly obvious. It is also extremely dangerous and distorting.
9. Reciprocation Tendency – We tend to return a favor when one is given to us. This can be a good thing, but it may lead you astray by making you give a favor that’s detrimental to you.
10. Influence from Mere Association – We are easily manipulated purely by association with others. The media is big in exploiting this tendency.
11. Simple Pain Avoiding Psychological Denial – Life can be too painful at times, so we use denial as a coping mechanism to mask what’s truly going on.
12. Excessive Self-Regard Tendency – We all think we are above average. Mathematically this is impossible.
13. Over-Optimism Tendency – Being greedy. I’m sure we can all agree that there are numerous pitfalls to being greedy.
14. Deprival-Superreaction Tendency – Loss aversion. This is the concept that people would much rather avoiding losing something than gaining something. This one is a major reason why many people are stuck in their circumstance. They are afraid to risk losing what they have to get something better.
15. Social-Proof Tendency – We tend to think and act like those around us. Look at a group of friends. They think, talk, and act the same way. Some scientific research studies say they even begin to look alike after time. Be careful of the company you keep.
16. Contrast-Misreaction Tendency – This is a problem of misunderstanding comparisons. To counteract this, look at the inherent value of something or someone, not its value in relation to other things or people.
17. Stress – Influence Tendency – Stress can cause extreme reactions to minor events. High amounts of stress lead to dysfunction.
18. Use-It-Or-Lose-It Tendency – Too many people learn a skill to pass a test or qualification rather than learning it thoroughly in order to fully understand the concept. This is one reason why I think college is a waste of time and money for many.
19. Availability Misweighing Tendency – We overweight what’s easily available. I call this “majoring in minors”.
20. Drug-Misinfluence Tendency – Impairment due to drugs and alcohol. It’s okay to have a few every once and a while. I feel however that if you want to be successful you have to cut down on the partying.
21. Senescence-Misinfluence Tendency – Decay in cognitive and physical function due to aging.
22. Authority-Misinfluence Tendency – Following orders just because the words come form an authority figure. Question your leaders: Question it all.
23. Twaddle Tendency – Spending too much time on silly things. This one is for those of you spending 3-4 hours a day on social media.
24. Reason- Respecting Tendency – This is where people want the answers to something but don’t care to know the background information or reasoning to gain a better understanding.
25. Lollapalooza Effect/Tendency – This is the consequence of combining a number of these biases when trying for a particular outcome. I see this all too often with tons of people. In the words of the late great Albert Einstein: “Insanity is doing the same thing over and over again expecting a different result.”
So there you have it. These are the 25 ways your brain uses bias to shape reality. Perception is reality, so you’d better make sure that what you are seeing is right. I truly believe in the idea presented by the philosopher Renee Descartes: “I think therefore I am.” The only scope that you have to construct reality is your own. No matter what, you will always be you, and understand things in a way that is completely unique to you. A continual learning process will make you become more experimental in life. The more you conduct experiments into what works and what doesn’t, you will be able to better define what you need to get the good life.