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Cheatography

25 Cognitive Biases Cheat Sheet (DRAFT) by [deleted]

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Introd­uction

The power that incentives and disinc­entives have on the actions of others cannot be overst­ated. Munger says this should be obvious but so many people don’t understand the how important incentives are for shaping people’s motivation to complete a task. Incentives and disinc­entives are extremely important in changing behavior.

Cognitive Biases

Bias
Tendency
Descri­ption
1
Reward and Punishment Super-­Res­ponse
The power that incentives and disinc­entives have on the actions of others cannot be overst­ated. Munger says this should be obvious but so many people don’t understand the how important incentives are for shaping people’s motivation to complete a task. Incentives and disinc­entives are extremely important in changing behavior
2
Liking­/Loving
We ignore the faults of other people, products or companies that we admire. According to Charlie Munger, a newly arrived human is born to like and love, and the strongest inborn tendency to love is that of a mother for its child. Liking­/Loving tendency makes the liker or lover tend to: To ignore the faults of, and comply with wishes of the object of its affection. To favor people, products and actions merely associated with the object of his affection as seen in bias 10 – influence from mere associ­ation. To distort other facts to facilitate love.
3
Dislik­ing­/Hating
We also ignore the virtues of those things we dislike and distort the facts to facilitate that hatred while putting on blinders to other options and opinions. Dislik­ing­/Hating Tendency happens from the time the newly arrived human is also born to “dislike and hate” 1) Ignore the virtues in the object of dislike. 2) Dislike people products and actions merely associated with the object of his dislike. 3) Distort other facts to facilitate hatred. Disliking distor­tions often makes mediation between opponents locked in hatred either difficult or imposs­ible.
4
Doubt-­Avo­idance
If we are unsure about a decision we try to quickly remove any doubt by making an ill-in­formed, quick decision, this is doubt-­avo­idance tendency Doubt-­avo­idance tendenty is triggered by some combin­ation of puzzlement and stress.
5
Incons­ist­enc­y-A­voi­dance
We have a reluctance to change. Elimin­ating bad habits is a rare trait. The brain of man conserves progra­mming space by being reluctant to change, which is a form of incons­istency avoidance. Factors that create an anti-c­hange and Incons­istency Avoidance Tendency mode in humans: It facili­tated faster decisions when speed of decision was an important contri­bution to the survival on nonhuman ancestors that were prey. It facilitate the survival advantage that our ancestors gained by cooper­ating in groups, which would have been more difficult to do if everyone was always changing responses. It was the best form of solution that evolution could get to in the limited number of genera­tions between the start of literacy and today’s complex modern life.
6
Curiosity
There is not enough curiosity to learn, even though you receive so many benefits from a continuous learning process. Munger says, “the curious are also provided with much fun and wisdom once formal education has ended.” Curiosity tendency has been one of the main drivers in human progress throughout history, the amount of curiosity in the human species is much more than any other mammal species
7
Kantian Fairness
Life isn’t fair, but many can’t accept this. Tolerating a little unfairness should be okay if it means a greater fairness for all. The example Munger uses is letting in other drivers on the freeway knowing they will recipr­ocate in the future. Kantian Fairness Tendency Kant’s “Categ­orical impera­tive” or golden rules consists of humans require to follow those behavior patterns that, if followed by all others, would make the surrou­nding human system work best for everybody.
8
Envy/J­ealousy
Self-e­xpl­ana­tory, but Munger makes an intere­sting point that envy/j­eal­ously tendency is surpri­singly absent from most Psychology textbooks. Envy/j­eal­ously tendency comes from the need to get often-­scarce food, this occurs often when the food is seen in possesion of another member of the same species “it is not greed that drives the world, but envy” – Warren Buffet
9
Recipr­ocation
In recipr­ocation tendency, we tend to want to return the favor when someone helps us, which can be a good thing at times, but it can also lead to poor decisions if you recipr­ocate business deals based on these minor favors.
10
Influe­nce­-Fr­om-­Mer­e-A­sso­ciation
We can be easily manipu­lated by mere associ­ation. It can be a group of people, the quality of a product, advert­ising, etc.
11
Simple, Pain-A­voiding Psycho­logical Denial
We have a habit of distorting the facts until they become bearable for our own views.
12
Excessive Self-R­egard
We all think we’re above average. This is where overco­nfi­dence comes from. Munger says the greatest type of pride should be taking pride in being trustw­orthy to avoid developing an ego. This is the sickness of dictators…
13
Over-O­ptimism
Over-o­ptimism bias usually shows that excess of optimism is the normal human condition
14
Depriv­al-­Sup­err­eaction
Depriv­al-­Sup­err­eaction in a way is loss aversion. Loss aversion refers to people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psycho­log­ically, as gains. A man ordinarily reacts with irrational intensity to even a small loss, or threatened loss, of property, love, friend­ship, dominated territory, opport­unity, status or any other valued thing
15
Social­-Proof Tendency
Social­-Proof Tendency is an automatic tendency to think and act as others around think and act
16
Contra­st-­Mis­rea­ction
Our problem here is a misund­ers­tanding of compar­isons and missing out on the magnitude of decisions, it is better to evaluate people and objects by themselves and not by their contrast. An example of Contrast Misrea­ction Tendency Contrast Misrea­ction Tendency is routinely used to cause disadv­antge for a customer, making an ordinary price seem low, a vendor will very frequently create a highly artificial price that is much higher than the price always sought, then advertise the standard price as a big reduction from his phony price.
17
Stress­-In­fluence
Adrenaline tends to produce faster and more extreme reactions. Some stress can improve perfor­mance but heavy stress often leads to dysfun­ction.
18
Availa­bil­ity­-Mi­swe­ighing
We overweight what’s easily available. A checklist or set of rules can help with this tendency. Man’s imperfect, limite­d-c­apacity brain easily drifts into working with what’s easily available to it. And the brain can’t use what it can’t remember or what it is blocked from recogn­izing because it is heavily influenced by one or more psycho­logical tendencies bearing strongly on it, the mind overwe­ights what is easily available and displays Availa­bil­ity­-Mi­swe­ighting Tendency. The great algorithm to remember in dealing with availa­bility bias is simple: “An idea or a fact is not worth more merely because it is easily available to you”
19
Use-it­-or­-Lo­se-It
Too many learn a skill to simply cram for a test or presen­tation instead of trying to actually understand it fluently Skills attenuate with disuse. Throughout his life, a wise man engages in practice for all his useful, rarely used skills, may of them outside his discip­line, as a sort of duty to his better self. Skills of a very high order can be maintained only with daily practice. Use-it­-or­-lo­se-it tendency postulates that When a skill is raised to fluency then the skill (1) will be lost more slowly and (2) will come back faster when refreshed with new learning.
20
Drug-M­isi­nfl­uence
This is a very strong tendency that costs lives. It can only be supple­mented by Simple pain-a­voiding psycho­logical denial
21
Senesc­enc­e-M­isi­nfl­uence
As we age there is a natural loss of certain skills and abilities. Continuous thinking and learning helps to slow the decay.
22
Author­ity­-Mi­sin­fluence
Following orders just because someone says so. Living in dominance hierar­chies as he does, man was born mostly to follow leaders, with only a few people doing the leading. And so, human society is formaly organized into dominance hierar­chies.
23
Twaddle
This is basically spending too much time on nonsense
24
Reason – Respecting Tendency
Some people just want the answers, not the reasons or a better unders­tanding
25
Lollap­alooza Tendency
The Tendency to Get Extreme Conflu­ences of Psycho­logical Tendencies Acting in Favor of a Particular Outcome