Causes of Misjudgment

Brian Gongol

This list originates with Charlie Munger's famous lecture on the "Psychology of Human Misjudgment", of which there are several versions floating around. This is an adaptation and extension of Munger's original work.

Cause of error or misjudgment What it is How to avoid it
Conflict avoidance Most people will go out of their way to suffer inconvenience rather than engage in conflict. A small number of people are actively interested in conflict, but they are rare exceptions. By avoiding conflict in the extreme, many people suffer needlessly at the hands of the world's sociopaths (mildly expressed or more severely so). Train yourself to recognize sociopaths in the wild -- even the mild ones. Set the bar much lower for dealing with their nonsense than what you'd forgive in other people. Understand that other people's conflict avoidance is the leverage they use against the world, and that standing up to them is an act you perform on behalf of the weak, the meek, and those who haven't learned to recognize psychopathy in the wild.
Proximity Humans have a tendency to adopt the behavior of those closest to them. This applies whether we're talking about a family, a group of friends, co-workers, or even on a much larger scale. This is why people say that an expert is someone who comes from more than 100 miles away (or some other arbitrary distance) to tell you something. The perceived expertise sometimes comes from simply not being in the milieu. There is some merit to that -- if we do things strictly because the people around us are doing them, then we may just be good at being wrong together. Sample frequently from outside your normal circles. See what people think and do when they aren't from "around here", or when they aren't circulating in the same social or professional groups as yourself. When differences can be seen, question whether there is an objective reason to be doing things your way or theirs -- and never discount the possibility that both ways are totally arbitrary.
Inertia Inertia doesn't just apply to physics. We tend to do the same things we've always done, because it consumes mental energy to examine what we're doing -- and there simply isn't enough mental energy available to objectively evaluate everything we do every day. Habits and patterns can be very efficient at conserving mental energy and letting us spend time thinking about new and novel problems, but not if the inertia is heading in the wrong direction. To borrow the line from "Ferris Bueller's Day Off": "Life moves pretty fast. If you don't stop and look around once in a while, you could miss it." It may have been a line from a comedic film, but it's actually quite solid advice to bear in mind. Deliberately pulling away from the ordinary routines of day-to-day life for a conscious examination of what you're actually doing can help to prevent the commission (and repetition) of mistakes.
Empathy tunnel-vision The insistence that someone cannot be credible on a subject without having walked the proverbial mile in your shoes.
The show-me state Believing that a hypothetical risk or problem isn't real until someone can show a case when it actually occurred
Assumption of malice Assuming the worst in other people. The fact is that only 1% of people are actually sociopathic; the other 99% can generally be assumed to be trying to do the right thing, at least as far as they can see it. Differences of opinion on what the right thing to do can of course emerge between different parties, but the assumption should generally be that the other party is acting in good faith. However, one must also be on guard against the 1% who legitimately are sociopathic.
This list is far from complete -- it is entirely a work in progress.