CHARLIE MUNGER 00:08
Bias from the non-mathematical nature of the human brain in its natural state as it deals with probabilities employing crude heuristics and is often mislead by mere contrast. The tendency to overweigh conveniently available information and other psychological rooted mis-thinking tendencies on this list when the brain should be using the simple probability mathematics of Fermat and Pascal, applied to all reasonably attainable and correctly weighted items of information that are of value in predicting outcomes. The right way to think is the way Zeckhauser plays Bridge. It’s just that simple.
And your brain doesn’t naturally know how to think the way Zeckhauser knows to play Bridge. Now you notice I put in that availability thing, and there I’m mimicking some very eminent psychologists … [Inaudible] and Tversky, who raised the idea of availability to a whole heuristic of misjudgment.
You know, they are very substantially right. I mean, ask the Coca-Cola company, which has raised availability to a secular religion, if availability changes behavior. You’ll drink a hell of a lot more Coke if it’s always available. Availability does change behavior and cognition.
Nonetheless, even though I recognize that and applaud Tversky, Kahneman, I don’t like it for my personal system except as part of a greater subsystem, which is you gotta think the way Zeckhauser plays Bridge. It isn’t just the lack of availability that distorts your judgment. All the things on this list distort judgment. And I wanna train myself to mentally run down the list instead of just jumping on availability. So that’s why I state it the way I do.
In a sense, these psychological tendencies make things unavailable ’cause if you quickly jump to one thing and then because you’ve jumped to it, the consistency and commitment tendency makes you lock in.
Boom, that's here, number one.
Or if something is very vivid, which I’m going to come to next, that will really pound in. And the reason that the thing that really matters is now unavailable and what’s extra vivid wins is … the extra vividness creates the unavailability. So I think it’s much better to have a whole list of things that cause you to be less like Zeckhauser than it is just to jump on one factor.