The 25 Cognitive Biases

[Siim Land]

Charlie Munger is a businessman and an investor. He has created a list of the 25 cognitive biases that influence our behavior and decision making in some way. Keep in mind that not all of them are correct all the time. But they’re still subconscious programs that we’re hardwired to exhibit.

Knowing your cognitive biases will help you understand your own nature better, prevent making impulsive decisions and persuade others.

Here's my video explaining all of the cognitive biases:

 

 

• Bias 1 Reward/Punishment Tendency - 00:30 - Everyone is motivated to do something if they can gain from it, but everyone is also motivated to do something or avoid doing it if there are punishments.
• Bias 2 Liking/loving Tendency - 00:49 - We ignore the faults and flaws of people or products if we like or love them.
• Bias 3 Disliking/Hating Tendency - 01:07 - We ignore the virtues and positive aspects of people we dislike. We just hate them because…
• Bias 4 Doubt/Avoidance Tendency - 01:23 - We hate uncertainty. If we are unsure about a decision, we try to quickly remove any doubt by making a hasty decision so that we could be certain again.
• Bias 5 Inconsistency/Avoidance Tendency - 01:39 - We have a reluctance to change ourselves and our habits.
• Bias 6 Curiosity Tendency - 01:55 - Curiosity to learn continuously. We also want to know how the story ends.
• Bias 7 Kantian Fairness Tendency - 02:13 - It’s the Golden Rule – Treat others like you would like to be treated. 
• Bias 8 Envy/Jealousy Tendency - 02:28 - Envy and jealousy come from the need to get access to scarce resources. This happens when the object of desire is seen in possession of someone else.
• Bias 9 Reciprocation Tendency - 02:49 - We want to return the favor to someone who helps us.
• Bias 10 Influence From Mere Association - 03:00 - We can be easily manipulated by mere association. It can be a group of people, the quality of a product, advertising, etc. That’s why brands use famous people to promote their products. 
• Bias 11 Simple Pain-Avoiding Psychological Denial - 03:25 - We have a habit of distorting the facts until they become bearable for our own views. 
• Bias 12 Excessive Self-Regard Tendency - 03:47 - We all think we’re above average. We’re smarter, more attractive, more persuasive than we really are. 
• Bias 13 Over-Optimism Tendency - 03:59 - This bias shows that we tend to be more optimistic in any situation than we have reasons to be.
• Bias 14 Deprival Superreaction Tendency - 04:09 - This is loss aversion. You much rather prefer to avoid losing something than gaining something.
• Bias 15 Social Proof Tendency - 04:19 - You look at other people, their status, group-think, to think and act as they do.
• Bias 16 Contrast Misreaction Tendency - 04:30 - We misunderstand comparisons and can thus make poor decisions. 
• Bias 17 Stress Influence Tendency - 04:47 - We will act faster and get more extreme reactions if adrenaline is running through our body.
• Bias 18 Availability Misweighing Tendency - 05:02 - We overweight what’s easily available. Our brain starts working with what it has the easiest access to. 
• Bias 19 Use It Or Lose It - 05:17 - What you don’t use you lose. You lose your skills if you don’t use them.
• Bias 20 Drug Misinfluence Tendency - 05:25 - You’re prone to do drugs and get addicted to them.
• Bias 21 Senescence Misinfluence Tendency - 05:39 - As we age there is a natural loss of certain skills and abilities. 
• Bias 22 Authority Misinfluence Tendency - 06:04 - You tend to follow orders from higher authority figures just because they say so.
• Bias 23 Twaddle Tendency - 06:33 - This is basically spending too much time on nonsense. 
• Bias 24 Reason Respecting Tendency - 06:43 - Some people just want the answers, not the reasons or a better understanding. There’s a study where a person jumps in front of a line and succeeds just because they say the word ‘because.’
• Bias 25 Lollapalooza Tendency - 07:25 - If several of your cognitive biases start working together, they will have a much greater effect. 

These are all the 25 cognitive biases and there are probably a lot more of them. Keep in mind that they don’t always apply to every situation. Some people exhibit some biases more whereas others do so less.

How to avoid falling victim to these cognitive biases?

You want to develop meta-awareness and mindfulness. This way you can first recognize the presence of your own blindspots and remain aware in your daily decision making.

I think we should all know these, even when we ourselves don't exhibit them always.

Stay Empowered
Siim

[Radical Honesty]

@Siim Land Brilliant post! It is incredibly hard to avoid some of these biases. 

Ill add another one:

The Fundimental Attribution Error: We tend to think other people's mistakes are caused by their poor character—as opposed to the circumstances they were in. On the other hand, we view are own mistakes as caused by the circumstances we are in, rather than by our poor character. (And the converse for positive things we have done)

One example of this would be assuming other people who failed at starting a buisness failed because they were lazy, unmotivated and stupid. Whereas assuming that we failed at starting a buisness because of the circumstances in the market. 

[Siim Land]

@Radical Honesty Thanks! 

Yes, there are a ton of other biases. These are just Munger's which he uses in the context of marketing and business. There's an entire page for all the cognitive biases on Wikipedia. Check it out!

The one you mentioned is quite prevalent indeed. Coincides with the one of thinking ourselves to be above average. "I'm a special snow flake," needs to be opposed by the cold harsh fact that we're just an insignificant piece of meat.

I have another bias, which we should all know! 

Bias Blind Spot Tendency - The tendency to see oneself as less biased than other people, or to be able to identify more cognitive biases in others than in oneself.