The Psychology of Human Misjudgement - Charlie Munger Full Speech

Charlie Munger presents 24 standard causes of human misjudgment, emphasizing the power of incentives and the impact of psychological biases on decision-making. He illustrates reinforcement with the Federal Express case, where paying by the shift improved package handling. Munger also explores psychological denial, incentive-caused bias citing a doctor's unnecessary gallbladder removals, and the consistency and commitment tendency, exemplified by Max Planck's observation on the old guard of physics. He further discusses Pavlovian and Skinnerian associations, the Persian messenger syndrome, and the deprival superreaction syndrome, using the New Coke example. Munger argues that understanding these tendencies is crucial for better judgment and ethical behavior, advocating for systems that mitigate misbehavior.