The Psychology of Human Misjudgment

 The Psychology of Human Misjudgment

– Poor Charlie Almanack

It fascinated me that both the fertile female honeybee and the fertile female harvester ant could multiply their quite different normal life expectancies by exactly twenty by engaging in one gangbang in the sky. [?]

German folk saying: “We are too soon old and too late smart.”

Influence-Robert Cialdini; a huge number of his books were bought by salesmen who wanted to learn how to become more effective in misleading customers. Please remember this perverse outcome when my discussion comes to incentive-caused bias as a consequence of the superpower of incentives.

The limitations inherent in evolution’s development of the nervous-system cells that control behavior are beautifully demonstrated by these insects which often have a mere 100,000 or so cells in their entire nervous systems, compared to man’s multiple billions of cells in his brain alone.

The ant learns a little behavior from experiences, but mostly it merely responds to ten or so stimuli with a few simple responses programmed into its nervous system by its genes. … The ant learns a little behavior from experiences, but mostly it merely responds to ten or so stimuli with a few simple responses programmed into its nervous system by its genes. … Naturally, the simple ant behavior system has extreme limitations because of its limited nerve-system repertoire. For instance, one type of ant, when it smells a pheromone given off by a dead ant’s body in the hive, immediately responds by cooperating with other ants in carrying the dead body out of the hive. And Harvard’s great E.O. Wilson performed one of the best psychology experiments ever done when he painted dead-ant pheromone on a live ant. Quite naturally, the other ants dragged this useful live ant out of the hive even though it kicked and otherwise protested throughout the entire process. Such is the brain of the ant. … follow the ant ahead. walking in a big circle. walk round and round until perish.

cognition is ordinarily situation-dependent so that different situations often cause different conclusions, even when the same person is thinking in the same general subject area.

One: Reward and Punishment Superresponse Tendency

Federal Express case: moral suasion didn’t work; paid per shift, not per hour

Xerox, Joe Wilson, commission arrangement with the salesmen gave a large and perverse incentive to push the inferior machine on customers, who deserved a better result.

Mark Twain’s cat, bad experience with hot stove, never again sat on a hot or cold stove.

Ben Franklin in Poor Richard’s Almanack: “If you would persuade, appeal to interest and not to reason.”

both client and counsel lost their careers.

remember how a foolish and willful ignorance of the superpower of rewards caused Soviet communists to get their final result as described by one employee: “They pretend to pay us and we pretend to work.” Perhaps the most important rule in management is “Get the incentives right.”

Harvard, where B. F. Skinner; “random distribution” kept the reflexive behavior longest in place.
utopia, he tried to explain everything with incentive effects. “To a man with only a hammer every problem looks pretty much like a nail.”

incentive-caused bias (one of the most important consequences): he drifts into immoral behavior and  rationalizing his bad behavior, like the salesmen at Xerox.

Antidotes: 1) especially fear professional advice when it is especially good for the advisor; (2)learn and use the basic elements of your adviser’s trade as you deal with your advisor; and (3) double check, disbelieve, or replace much of what you’re told, to the degree that seems appropriate after objective thought.

Defense Department: contracts paying on a cost-plus-a-percentage-of-cost basis

cash registers: bad behavior is intensely habit-forming when it is rewarded; Patterson; National Cash Register Company; like Carnegie, “shrouds have no pockets”

The strong tendency of employees to rationalize bad conduct in order to get rewards requires many antidotes in addition to the good cash control promoted by Patterson. sound accounting theory and practice. This was seldom better demonstrated than at Westinghouse [bad loan and accounting policies]… outside accountants and auditors? “Whose bread I eat, his song I sing.” the accountants and other senior people who tolerated a nearly insane incentive structure, almost sure to trigger incentive-caused bias in a lending officer. I puts most blame on the accountants and other senior people who created the accounting system.

and General Electric’s Kidder Peabody; reaching its nadir at Enron

“agency cost”: as grain is always lost to rats, employers always lose to employees who improperly think of themselves first

the sweatshop, the unsafe work place, etc pressure from unions; government action, such as wage and hour laws, work-place-safety rules
Yin and Yang.

a sales force living only on commissions will be much harder to keep moral than one under less pressure from the compensation arrangement. On the other hand, a purely commissioned sales force may well be more efficient per dollar spent. Therefore, difficult decisions involving trade-offs
are common in creating compensation arrangements in the sales function.

Another generalized consequence of incentive-caused bias is that man tends to “game” all human systems, often displaying great ingenuity in wrongly serving himself at the expense of others. … (in) Anti-gaming features, (what) needed in system design is an admonition: Dread, and avoid as much you can, rewarding people for what can be easily faked. … society consequently pays a huge price in the deterioration of behavior and efficiency [company is same. that’s why the company culture is very important.]

Main driver: money and sex, friendship, companionship, advancement in status. and other nonmonetary items.

Granny’s Rule: “no carrot, no desert.”

prompt rewards work best. [即时反馈]

punishments: George Washington hanged farm-boy deserters forty feet high.

Two: Liking/Loving Tendency

newly hatched baby goose is programmed, though the economy of its genetic program, to “love” and follow the first creature that is nice to it. [gosling tendency]

what will a man naturally come to like and love, apart from his parent, spouse and child? Well, he will like and love being liked and loved … man will generally strive, lifelong, for the affection and approval of many people not related to him.

One very practical consequence of Liking/ Loving Tendency is that it acts as a conditioning device that makes the liker or lover tend (1) to ignore faults of, and comply with wishes of, the object of his  affection, (2) to favor people, products, and actions merely associated with the object of his affection (as we shall see when we get to “Influence-from-Mere-Association Tendency,” and (3) to distort other facts to facilitate love.

The phenomenon of liking and loving causing admiration also works in reverse. Admiration also causes or intensifies liking or love. With this “feedback mode” in place, the consequences are often extreme, sometimes even causing deliberate self-destruction to help what is loved.

a man who is so constructed that he loves admirable persons and ideas with a special intensity has a huge advantage in life.

There are large social policy implications in the amazingly good consequences that ordinarily come from people likely to trigger extremes of love and admiration boosting each other in a feedback mode. For instance, it is obviously desirable to attract a lot of lovable, admirable people into the teaching profession.

Three: Disliking/Hating Tendency

the newly arrived human is also “born to dislike and hate”, same with most apes and monkeys

As a result, the long history of man contains almost continuous war.

Politics is the art of marshalling hatreds.” And we also get the extreme popularity of very negative political advertising in the United States.

sibling hate, sibling rivalry

Disliking/Hating Tendency also acts as a conditioning device that makes the disliker/hater tend to (1) ignore virtues in the object of dislike, (2) dislike people, products, and actions merely associated with the object of his dislike, and (3) distort other facts to facilitate hatred.

Mediations between Israelis and Palestinians are difficult.

Four: Doubt-Avoidance Tendency

The brain of man is programmed with a tendency to quickly remove doubt by reaching some decision.

It is easy to see how evolution would make animals, over the eons, drift toward such quick elimination of doubt. After all, the one thing that is surely counterproductive for a prey animal that is threatened by a predator is to take a long time in deciding what to do. And so man’s Doubt-Avoidance Tendency is quite consistent with the history of his ancient, nonhuman ancestors.

at least some leaps of religious faith are greatly boosted by this tendency.

when we get to Social-Proof Tendency and Stress-Influence Tendency, what usually triggers Doubt-Avoidance Tendency is some combination of (1) puzzlement and (2) stress

Five: Inconsistency-Avoidance Tendency

The brain of man conserves programming space by being reluctant to change, which is a form of inconsistency avoidance. Few people can list a lot of bad habits thar they have eliminated, and some people cannot identify even one of these. Instead, practically everyone has a great many bad habits he has long  maintained despite their being known as bad. Given this situation, it is not too much in many cases to appraise early-formed habits as destiny. When Marley’s miserable ghost says, “I wear the chains I forged in life,” he is talking about chains of habit thar were too light to be felt before they became too strong to be broken.

The rare life that is wisely lived has in it many good habits maintained and many bad habits avoided or cured. And the great rule that helps here is again from Franklin’s Poor Richard’s Almanack:”An ounce of prevention is worth a pound of cure.” What Franklin is here indicating, in part, is that Inconsistency-Avoidance Tendency makes it much easier to prevent a habit than to change it.

It is not entirely clear why evolution would program into man’s brain an anti-change mode alongside his tendency to quickly remove doubt. My guess is the anti-change mode was significantly caused by a combination of the following factors: (1) It facilitated faster decisions when speed of decision was an important contribution to the survival of nonhuman ancestors that were prey. (2) It facilitated 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. (3) 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. [?]

(judges and juries) are required to hear long and skillful presentations of evidence and argument from the side they will not naturally favor. … this helps prevent considerable bad thinking from “first conclusion bias.”
modern decision makers will often force groups to consider skillful counterarguments before making decisions.

(Lord Keynes:) it was not the intrinsic difficulty of new ideas that prevented their acceptance. Instead, the new ideas were not accepted because they were inconsistent with old ideas in place. What Keynes was reporting is that the human mind works a lot like the human egg. When one sperm gets into a human egg, there’s an automatic shut-off device that bars any other sperm from getting in. The human mind tends  strongly toward the same sort of result.

Max Planck: new ideas are seldom really accepted by the old guard. Instead, said Planck, the progress is made by a new generation that comes along, less brain-blocked by its previous conclusions.

(an antidote to first conclusion bias. ) Charles Darwin: He trained himself, early, to intensively consider any evidence tending to disconfirm any hypothesis of his, more so if he thought his hypothesis was a particularly good one.

good effects in civilization: public identities, public commitments, loyal

One corollary of Inconsistency-Avoidance Tendency is that a person making big sacrifices in the course of assuming a new identity will intensify his devotion to the new identity. … Tough initiation ceremonies can intensify bad contact as well as good.  mafia member, blood oath

it will often make man a “patsy” of manipulative “compliance-practitioners,”

Ben Franklin. As he was rising from obscurity in Philadelphia and wanted the approval of some important man, Franklin would often maneuver that man into doing Franklin some unimportant favor like lending Franklin a book. Thereafter the man would admire and trust Franklin more because a nonadmired and nontrusted Franklin would be inconsistent with the appraisal implicit in lending Franklin the book.

Small step by small step, the technique often worked better than torture in altering prisoner cognition in favor of Chinese captors. Korean War, Chinese brainwashing system [Influence – Cialdini]

“A man never forgets where he has buried the hatchet.” The effect accounts for much prisoner abuse by  guards, increasing their dislike and hatred for prisoners that exists as a consequence of the guards’ reciprocation of hostility from prisoners who are treated like animals

many a hypocrite is improved by his pretensions of virtue

“status quo bias”

young students are taught dubious political notions and then enthusiastically push these notions on the rest of us.

Six: Curiosity Tendency

There is a lot of innate curiosity in mammals. apes and monkeys. simian relatives.

Athens (including its colony, Alexandria) developed much math and science our of pure curiosity while the Romans made almost no contribution to either math or science. They instead concentrated their attention on the “practical” engineering of mines, roads, aqueducts, etc.

Seven: Kantian Fairness Tendency

“categorical imperative”

reciprocal courtesy
“first-come-first-served”
“fair-sharing” conduct,

how the world’s slavery was pretty well abolished during rhe last three cenruries after being tolerated for a great many previous centuries during which it coexisted with the world’s major religions.

Eight: Envy/Jealousy Tendency

A member of a species designed through evolutionary process to want often-scarce food is going to be driven strongly toward getting food when it first sees food.
This is probably the evolutionary origin of the e nvy/jealousy Tendency that lies so deep in human nature.
Sibling jealousy- It is often stronger than jealousy directed at strangers. Kantian Fairness Tendency probably contributes to this result.

“It is not greed that drives the world, but envy.” Warren

labeling some position as driven by envy/jealousy will be regarded as extremely insulting to the position taker, possibly more so when the diagnosis is correct than when it is wrong.

Nine: Reciprocation Tendency

both favors and disfavors; this tendency clearly facilitates group cooperation for the benefit of members. it mimics much genetic programming of the social insects.

wars

E. O. Wilson once waggishly suggested that if ants were suddenly to get atom bombs, all ants would be dead within eighteen hours. What both human and ant history suggest is (1) that nature has no general algorithm making intraspecies, turn-the-other-cheek behavior a booster of species survival, (2) that it is not clear that a country would have good prospects were it to abandon all reciprocate-disfavor tendency directed at outsiders, and (3) if turn-the-other-cheek behavior is a good idea for a country as it deals with outsiders, man’s culture is going to have to do a lot of heavy lifting because his genes won’t be of much help

The standard antidote to one’s overactive hostility is to train oneself to defer reaction. Tom Murphy “You can always tell the man off tomorrow if it is such a good idea.”

the tendency to reciprocate favor for favor is also very intense, so much so that it occasionally reverses the course of reciprocated hostility.

[small favour. Fix car tyres for free]

commercial trade, a fundamental cause of modern prosperity, is enormously facilitated by man’s innate tendency to reciprocate favors. … Daily interchange in marriage is also assisted by Reciprocation Tendency.

it does not join forces only with the superpower of incentives. It also joins Inconsistency-Avoidance Tendency helping cause (1) the fulfillment of promises made as part of a bargain, including loyalty promises in marriage ceremonies. and (2) correct behavior expected from persons serving as priests, shoemakers, physicians, and all else.

a salesman steers you into comfortable place to sit and gives you a cup of coffee, you are very likely being tricked, by this small courtesy alone, into parting with an extra five hundred dollars.
This potential loss will protect you to some extent. But suppose you are the purchasing agent of someone else.
Wise employers, therefore, try to oppose reciprocate-favor tendencies of employees engaged in purchasing. The simplest antidote works best: Don’t let them accept any favors from vendors. Sam Walton agreed with this idea of absolute prohibition. He wouldn’t let purchasing agents accept so much as a hot dog from a vendor.

Cialdini believes that subconscious Reciprocation Tendency thus became one important cause of the resignation of a United States president in the Watergate debacle, and so do I.

sacrificed human victims to their gods

Punic Wars

Reciprocation Tendency’s constructive contributions to man far outweigh its destructive effects

the very best part of human life probably lies in relationships of affection wherein parties are more interested in pleasing than being pleased-a not uncommon outcome in display of reciprocate-favor tendency.

To the extent the feeling of guilt has an evolutionary base …
averaged out, feelings of guilt do more good than harm, you may join in my special gratitude for reciprocate-favor tendency, no matter how unpleasant you find feelings of guilt.

Ten: Influence -from-Mere-Association Tendency

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most common in the world, responsive

behavior, creating a new habit, is directly triggered

by rewards previously bestowed

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when several similar items are

presented for purchase, the one with the highest

price will have the highest quality.
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With luxury goods, the

process works with a special boost because

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gain extra status

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chooses the polish with the prerry girl on the

can

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military bands play such impressive music

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Some of the most important miscalculations

come from what is accidentally associated with

one’s past success, or one’s liking and loving, or

one’s disliking and hating, which includes a natural

hatred for bad news.

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Think of Napoleon and Hitler when they

invaded Russia after using their armies with

much success elsewhere.

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a man foolishly

gambles in a casino and yet wins

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The proper antidotes to being made such a

patsy by past success are (1) to carefully examine

each past success, looking for accidental, non-

causative factors associated with such success that

will tend to mislead as one appraises odds implicit

in a proposed new undertaking and (2) to look for

dangerous aspects of the new undertaking that were

not present when past success occurred.
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we now often see even

stronger misinfluence from love as tearful mothers,

with heartfelt conviction, declare before TV cameras

the innocence of their obviously guilty sons.

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Franklin counseled: “Keep

your eyes wide open before marriage and half shut

thereafter.

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a tougher prescription:

“See it like it is and love anyway.”

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people underappraise boch the

competency and morals of competitors they dislike.

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Persian Messenger Syndrome

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killed some messengers whose

sole fault was that they brought home truthfr,rl bad

news,

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Jnion negotiators

and employer representatives

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Sometimes lawyers, knowing their clients will

hate them if they recommend an unwelcome but

wise settlement
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CBS

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Chairman Paley was hostile to people who brought

him bad news. The result was that Paley lived in

a cocoon of unreality, from which he made one bad

deal after another, even exchanging a large share of

CBS for a company that had to be liquidated shortly

chereafter.

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develop, through exercise of will, a

habit of welcoming bad new

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At Berkshire, there is

a common injunction: “Always tell us the bad news

promptly. It is only the good news that can wait.”

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Infl uence-from-Mere-Association Tendency

often has a shocking effect that helps swamp

the normal tendency to return favor for favor.

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the favor may

trigger an envy-driven dislike

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collecting below-market

rents

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most ninety-year-old

persons don’t think very well

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mere association lies in the common use of classi-

fication stereotypes.

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no old women good at higher math,
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Eleven: Simple, Pain-Avoiding Psychological Denial

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The reality is too painful to bear, so one discorts the

facts until they become bearable

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begrudge

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Even a small chance of suffering so great a

damage should be avoided.

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addicted persons tend

to believe that they remain in respectable condition,

with respectable prospects

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,’rl I Iwelve: Excessive Self-Regard Tendency

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the ninety percent of Swedish

drivers that judge themselves to be above average.

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Once owned,

they suddenly become worth more to him than he

would pay if they were offered for sale to him and

he didn’t alreadv own them.

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spouse

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children
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the “endowment effect.”

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strongly prefer people like himself.

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resembles

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cliquish

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Thus if the English departmenr at an elite univer-

sity becomes mentally dysfunctional or the sales

department of a brokerage firm slips into routine

fraud, the problem will have a natural tendency

to get worse and to be quite resistant to change

for the better.

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mired

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Some of the worst consequences in modern

life come when dysfunctional groups of cliquish

persons, dominated by Excessive Self-Regard

Tendency, select as new members of their organiza-

tions persons who are very much like themselves.

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Therefore, some of the most

useful members of our civilization are those who

are willing to “clean house” when they find a mess

under their ambit of control.

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In lotteries, the play is much lower when

numbers are distributed randomly rhan it is when

the player picks his own number. This is quite

irrational.

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Intensify man’s love of his own conclusions by

adding the possessory wallop from the “endowmenr

effect,”
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counterproductive is man’s

tendency to bet, time after time, in games of skill,

like golf or poker, against people who are obviously

much better players.

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More counterproductive yet are man’s

appraisals, typically excessive, of the quality of the

future service he is to provide to his business

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Excesses of self-regard often cause bad hiring

decisions because employers grossly overappraise

the worth of their own conclusions that rely on

impressions in face-to-face contact. The correct

antidote to this sort of follv is to underweigh face-

to-face impressions and overweigh the applicant’s

past record.

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I convinced fellow committee

members to stop all further interviews and simply

appoint a person whose achievement record was

much better than that of any other applicant.

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I was using

academic research showing poor predictive value of

impressions from face-to-face interviews.

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nterviewed the articulate, dynamic Carly

Fiorina

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Hewlett-Packard

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According to Tolstoy, the

worst criminals don’t appraise themselves as all

that bad. They come to believe either (1) that they

didn’t commit their crimes or (2) thac, considering

the pressures and disadvantages of their lives, it is

understandable and forgivable that they behaved as

they did and became what they became.

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The second half of the “Tolstoy effect”, where

the man makes excuses for his fixable poor perfor-

mance, instead of providing the fix, is enormously

important.

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ravages

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On

the personal level a man should try to face the two
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simple facts: (1) fixable but unfixed bad perfor-

mance is bad character and tends to create more

of itself, causing more damage to the excuse giver

with each tolerated instance, and (2) in demanding

places, like athletic teams and General Electric,

you are almost sure to be discarded in due course

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The main institutional antidotes ro rhis

part of the “Tolstoy effecr” are (1) a fair, meriro-

cratic, demanding culture plus personnel handling

methods that build up morale and (2) scverance

of the worst offenders.

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The child later became Dean of the

USC School of Music and then related to me whar

his father said when he saw his child taking candy

from the stock of his employer with the excuse that

he intended to replace it later. The father said, “Son,

it would be better for you to simply take all you want

and call yourself a thief every cime you do ir.”

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The best antidote to folly from an excess of

self-regard is to force yourself to be more objective

when you are thinking about yourself, your family

and friends, your property, and the value of your

past and future activity.

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This isn’t easy to do well

and won’t work perfectly, but it will work much

better than simply letting psychological nature take

its normal course.

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councer-

productive

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ir can cause

some weird successes from overconfidence that

happens to cause success. This factor accounts

for the adage: “Never underestimate the man who

overestimates himself.”

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Without such justified pride, many

more airplanes would crash

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Of all forms of useful pride, perhaps rhe mosr

desirable is a justified pride in being rrustworuhy.

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the trustworthy man, even after allowing

for the inconveniences of his chosen course, ordi-

narily has a life that averages our better than he

would have if he provided less reliability.

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t’nt . .

I hrteen: Overoptimism Tendency
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an excess of optimism

even when he is already doing well.

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One standard antidote to foolish optimism is

trained, habitual use of the simple probability rnath

of Fermat and Pasca

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The mental rules of thumb

that evolution gives you to deal with risk are not

adequate

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They resemble the dysfunctional golf

grip you would have if you relied on a grip driven

by evolution instead of golf lessons.

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Fourteen: Deprival- Superreaction Tendency

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the

loss seems to hurt much more than the gain seems

to help.

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if a man almost gets something

he greatly wants and has it jerked away from him

at the last moment, he will react much as if he had

long owned the reward and had it jerked away

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He will often compare what is near

instead of what really matters.

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canine

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to try and take some food away from him after he

already had it in his mouth.

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A man ordinarily reacts with irrational intensity to

even a small loss, or threatened loss, of property,

love, friendsh ip, dominated territor-v, opportu ni ty,

status, or any other valued thing

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As a natural

result, bureaucratic infighting over the threatened

loss of dominated territory often causes immense

damage to an institution as a whole.
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Jack Welch’s long fight against bureaucratic ills at

General Electric

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Few business leaders have ever

conducted wiser campaigns.

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dislike and hatred directed toward vocal nonbe-

lievers

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such ideology-based

groupthink that rejects almost all conflicting inputs.

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hostility

is often boosted both by (1) a concept ofbetrayal

that triggers additional Deprival-Superreaction

Tendency because a colleague is lost and (2) fears

that conflicting views will have extra persuasive

power when they come from a former colleague.

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burning the victim

alive.

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with great antipathy to non-believers, causing

extremes of cognitive dysfunction.

Underline (red), 23 Nov. 2016, 4:40 pm:
I ) Inconsistency-Avoidance Tendency, plus

(2) Deprival-Superreaction Tendency.

Underline (red), 23 Nov. 2016, 4:40 pm:
an extreme culture of

courtesy, kept in place despite ideological differ-

ences,

Underline (red), 23 Nov. 2016, 4:40 pm:
bring in able and articulate disbelievers

of incumbent groupthink

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
clamor

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neighbors

displaying irrational, extreme deprival-superreac-

tion over some trifle in a zoning hearing
— Page 37 —

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employers tried to reduce wage

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takeaways

are also difficult to g

Underline (red), 23 Nov. 2016, 4:40 pm:
gambler to have a passion to

get even once he has suffered loss, and the passion

grows with the loss

Underline (red), 23 Nov. 2016, 4:40 pm:
the most addictive

forms of gambling provide a lot of near misses

Underline (red), 23 Nov. 2016, 4:40 pm:
produce a lot of meaningless bar-

bar-lemon results

Underline (red), 23 Nov. 2016, 4:40 pm:
open-outcry auctions

Underline (red), 23 Nov. 2016, 4:40 pm:
The best antidote to being thus triggered

into paying foolish prices at open-outcry auctions

is the simple Buffett practice: Don’t go to such

auctions.

Underline (red), 23 Nov. 2016, 4:40 pm:
Deprival-Superreaction Tendency and Incon-

sistency-Avoidance Tendency often join to cause

one form of business failure. In this form of ruin,

a man gradually uses up all his good assets in a

fruitless attempt to rescue a big venture going bad.
— Page 38 —

Underline (red), 23 Nov. 2016, 4:40 pm:
Berkshire Hathaway shareholders I know never sell

or give away a single share after immense gains in

market value have occurred. Some of this reaction

is caused by rational calculation, and some is, no

doubt, attributable to some combination of (1)

reward superresponse, (2) “status quo bias” from

Inconsistency-Avoidance Tendency, and (3) “rhe

endowment effect” from Excessive Self-Regard

Tendency. But I believe the single strongest

irrational explanation is a form of Deprival-Super-

reaction Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
Partly they dislike

facing what they consider an impairment of identity, but mostly they fear missing out on future gains

from stock sold or given away.

Underline (red), 23 Nov. 2016, 4:40 pm:
Fifteen: Social-Proof Tendencv

Underline (red), 23 Nov. 2016, 4:40 pm:
he automatically thinks and

does what he observes to be thought and done

around him

Underline (red), 23 Nov. 2016, 4:40 pm:
an auromaric tendency to

think and act as he sees others around him thinkine

and acting.

Underline (red), 23 Nov. 2016, 4:40 pm:
face the rear of the

elevator,

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teenagers’

cognitive errors

Underline (red), 23 Nov. 2016, 4:40 pm:
superrespect by young people for their peers,
— Page 39 —

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lhis makes it wise for parents to rely

more on manipulating the quality of the peers than

on exhortations to their own offspring

Underline (red), 23 Nov. 2016, 4:40 pm:
many bad decisions that

were quickly triggered by discomfort from doubt.

Underline (red), 23 Nov. 2016, 4:40 pm:
Tiiggering most readily occurs in the

presence of puzzlement or stress

Underline (red), 23 Nov. 2016, 4:40 pm:
disreputable sales organizations

Text (red), 23 Nov. 2016, 4:40 pm:
Well Fargo scandle

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human societies (1) stop any bad

behavior before it spreads and (2) foster and display

all good behavior.

Underline (red), 23 Nov. 2016, 4:40 pm:
$2 for South Dakota residents and $5 for

nonresidents. All the Nebraska residents, one

by one, signed up for South Dakota licenses with

phony South Dakota addresses

Underline (red), 23 Nov. 2016, 4:40 pm:
Serpico

Svndrome,”
— Page 40 —

Underline (red), 23 Nov. 2016, 4:40 pm:
near-totally corrupt New York police division joined

by Frank Serpico.

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In social proof, it is not only action by others

that misleads but also their inaction

Underline (red), 23 Nov. 2016, 4:40 pm:
death of Kitty Genovese

Underline (red), 23 Nov. 2016, 4:40 pm:
Joe

Rosenfield, as he said, “They asked me if I wanted

to become a director of Northwest Bell, and it was

the last thing they ever asked me.”

Underline (red), 23 Nov. 2016, 4:40 pm:
A typical board-of-directors’

culture

Underline (red), 23 Nov. 2016, 4:40 pm:
In advertising and sales promotion,

Underline (red), 23 Nov. 2016, 4:40 pm:
Nlonkey-see, monkey-do

Underline (red), 23 Nov. 2016, 4:40 pm:
Social-Proof Tendency often interacts in a

perverse way with Envy/Jealousy and Deprival-

Superreaction Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
fought and howled over a single surplus

shingle while surrounded by a virtual sea of surplus

shingles.

Underline (red), 23 Nov. 2016, 4:40 pm:
The Middle East now presents just such a

threat. By now the resources spent by Jews, Arabs

and all others over a small amount of disputed land
— Page 41 —

Underline (red), 23 Nov. 2016, 4:40 pm:
Learn how to ignore the examples from others

when they are wrong, because few skills are more

worth having.

Underline (red), 23 Nov. 2016, 4:40 pm:
Sixteen: Contrast-Misre action Tendencv

Underline (red), 23 Nov. 2016, 4:40 pm:
the contrast in what is seen is registered

Underline (red), 23 Nov. 2016, 4:40 pm:
price

is so low compared to his concurrent purchase

Underline (red), 23 Nov. 2016, 4:40 pm:
a wonderfr-rl woman having terrible

parents marries a man who would be judged satis-

factory only in comparison to her parents. Or as

when a man takes wife number two who would be

appraised as all right only in comparison to wife

number one.

Underline (red), 23 Nov. 2016, 4:40 pm:
The salesman deliber-

ately shows the customer three au’ful houses at

ridiculoLrslv high prices. Then he shows him a

merely bad house at a price only moderately too

high.

Underline (red), 23 Nov. 2016, 4:40 pm:
being aware of

psychological ploys is not a perfect defense.
— Page 42 —

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toward disaster, with each step being very small

Underline (red), 23 Nov. 2016, 4:40 pm:
Cognition, misled by tiny changes involving low

contrast, will often miss a trend that is destiny.

Underline (red), 23 Nov. 2016, 4:40 pm:
“A small leak will sink

a great ship.”

Underline (red), 23 Nov. 2016, 4:40 pm:
Ben Franklin’

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
aphorisms

Underline (red), 23 Nov. 2016, 4:40 pm:
Seventeen: Stress- Influence Tendencv

Underline (red), 23 Nov. 2016, 4:40 pm:
stress makes Social-Proof

Tendencv more oowerful.

Underline (red), 23 Nov. 2016, 4:40 pm:
light stress can slightly improve

performance-say, in examinations-whereas heavy

stress causes dysfunction

Underline (red), 23 Nov. 2016, 4:40 pm:
causes an extreme of pessimism

Underline (red), 23 Nov. 2016, 4:40 pm:
nonde-

pressive mental breakdowns influenced by heavy

stress.

Underline (red), 23 Nov. 2016, 4:40 pm:
really heavy

stress than that it can cause depression
— Page 43 —

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a person’s love of his parents suddenly becomes

hate, as new love has been shifted suddenly to

a cult.

Underline (red), 23 Nov. 2016, 4:40 pm:
He found (1) that he could classify dogs

so as to predict how easily a particular dog would

breakdown (2) that the dogs hardest to break

down were also the hardest to return to their pre-

breakdown state; (3) that any dog could be broken

down; and (4) that he couldn’t reverse a breakdown

except by reimposing stress.

Underline (red), 23 Nov. 2016, 4:40 pm:
Pavlov is now a sort of

forgotten hero in medical science.
— Page 44 —

Underline (red), 23 Nov. 2016, 4:40 pm:
l,\- -l Elgnteen: Availability-Misweighing Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
When I’m not near the girl I love, I love the girl I’m near.”

Underline (red), 23 Nov. 2016, 4:40 pm:
Man’s imperfect, limited-capacity

brain easily drifts into working with what’s easily

available to it.

Underline (red), 23 Nov. 2016, 4:40 pm:
the brain can’r use whar 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 ir, as

the fellow is influenced bv the nearby girl in the

song.

Underline (red), 23 Nov. 2016, 4:40 pm:
The main antidote ro miscues from Availability-

Misweighing Tendency often involve procedures,

including use of checklists, which are almosr always

helpful.

Underline (red), 23 Nov. 2016, 4:40 pm:
Darwin did when he emphasized disconfirming

evidence.

Underline (red), 23 Nov. 2016, 4:40 pm:
to find and

hire some skeptical, articulate people

Underline (red), 23 Nov. 2016, 4:40 pm:
extra-vivid images

Underline (red), 23 Nov. 2016, 4:40 pm:
persuading someone

Underline (red), 23 Nov. 2016, 4:40 pm:
improving

one’s own memory

Underline (red), 23 Nov. 2016, 4:40 pm:
An idea or a fact is nor worth

more merely because it is easily available ro you.

Underline (red), 23 Nov. 2016, 4:40 pm:
Nineteen: Use-It-or-Lose-It Tendencv

Underline (red), 23 Nov. 2016, 4:40 pm:
All skills attenuate with disuse

Underline (red), 23 Nov. 2016, 4:40 pm:
This allows a pilot ro conrinuously
— Page 45 —

Underline (red), 23 Nov. 2016, 4:40 pm:
practice all of the rarely used skills that he can’t

afford to lose.

Underline (red), 23 Nov. 2016, 4:40 pm:
It is also essential for a thinking

man to assemble his skills into a checklist that he

routinely uses

Underline (red), 23 Nov. 2016, 4:40 pm:
Throughout his life, a wise man engages in

practice of all his useful, rarely used skills, many

of them outside his discipline, as a sort of duty to

his better self.

Underline (red), 23 Nov. 2016, 4:40 pm:
The hard rule of LJse-It-or-Lose-It Tendency

tempers its harshness for the diligent

Underline (red), 23 Nov. 2016, 4:40 pm:
If a skill is

raised to fluency, instead of merely being cramme d

in briefly to enable one to pass some test, then the

skill (1) will be lost more slowly and (2) will come

back faster when refreshed with new learning.

Underline (red), 23 Nov. 2016, 4:40 pm:
These are not minor advantages, and a wise man

engaged in learning some important skill will not

stop until he is really fluent in it.

Underline (red), 23 Nov. 2016, 4:40 pm:
aiventv: I Drug-Misinfl uence Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
Twenty-One: Senescence-Misinfluence Tendencv

Underline (red), 23 Nov. 2016, 4:40 pm:
Practically no one is good at learning complex

new skills when very old. But some people remain

pretty good in maintaining intensely practiced old

skills until late in life

Underline (red), 23 Nov. 2016, 4:40 pm:
Continuous thinking and learning, done with

jov can somewhat help delay what is inevitable.
— Page 46 —

Underline (red), 23 Nov. 2016, 4:40 pm:
Twenty-TWo: Authority-Misinfluence Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
Living in dominance hierarchies as he does, like all his ancestors before him, man was born mostly

to follow leaders, with only a few people doing

the leading.

Underline (red), 23 Nov. 2016, 4:40 pm:
copilot’s seat, was so anxious to please his boss

Underline (red), 23 Nov. 2016, 4:40 pm:
Stanley Milgram

Underline (red), 23 Nov. 2016, 4:40 pm:
how far authority figures could

lead ordinary people into gross misbehavior
— Page 47 —

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
mush

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
tip up, tip down, reel in, et

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
tarpon

Underline (red), 23 Nov. 2016, 4:40 pm:
Be careful whom you appoint to power

because a dominant authority figure will often be

hard to remove, aided as he will be by Authority-

Misinfluence Tendency
— Page 48 —

Underline (red), 23 Nov. 2016, 4:40 pm:
Twentv-Three: Twaddle Tendencv

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
copious

Underline (red), 23 Nov. 2016, 4:40 pm:
honeybee version of twaddle

Underline (red), 23 Nov. 2016, 4:40 pm:
B. F, Skinne

Underline (red), 23 Nov. 2016, 4:40 pm:
academic administration is to keep the people

who don’t matter from interfering with the work

of the people that do.

Underline (red), 23 Nov. 2016, 4:40 pm:
Twentv-Four: Reason-RespJcting Tendency

Underline (red), 23 Nov. 2016, 4:40 pm:
Carl Braun
— Page 49 —

Underline (red), 23 Nov. 2016, 4:40 pm:
You had to tell Who

was to do What, Where, When, and Why.

Underline (red), 23 Nov. 2016, 4:40 pm:
Reaso n- Re s pecti n g Te n dency

is so strong that even a person’s giving of mean-

ingless or incorrect reasons will increase compli-

ance lvith his orders and requests

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
claptrap

Underline (red), 23 Nov. 2016, 4:40 pm:
Twentv-Five:

Lollapal ooza Tendency
— Page 50 —

Underline (red), 23 Nov. 2016, 4:40 pm:
McDonnell Douglas airliner evacuation resr.
— Page 51 —

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
hangar

Underline (red), 23 Nov. 2016, 4:40 pm:
the tendencies

are probably much more good than bad. Otherwise,

they wouldn’t be there,
— Page 52 —

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Here is a short list of examples

reminding us of the great utility of elementary

psychological knowledge:

Underline (red), 23 Nov. 2016, 4:40 pm:
One: Carl Braun’s communication practices.

Two: The use of simulators in pilot training.

Three: The system of Alcoholics Anonymous.

Four: Clinical training methods in medical

schools.

Five: The rules of the U.S. Constitutional

Convention:

Underline (red), 23 Nov. 2016, 4:40 pm:
Granny’s incentive-driven rule

Underline (red), 23 Nov. 2016, 4:40 pm:
Seven: The Harvard Business School’s

emphasis on decision trees.

Underline (red), 23 Nov. 2016, 4:40 pm:
Eight: The use of autopsy equivalents at

Johnson & Johnson.

Underline (red), 23 Nov. 2016, 4:40 pm:
Nine: The great example of Charles Darwin as

he avoided confirmation bias,

Underline (red), 23 Nov. 2016, 4:40 pm:
“double blind” studies

Underline (red), 23 Nov. 2016, 4:40 pm:
Ten: The Warren Buffett rule for open-outcry

auctions: Don’t go.
— Page 54 —

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. I even hope

that rnore psvchology profcssors will join me in:

(1) making heavy use of inversion; (2) driving for a

complete description of thc psychological system scr

that it lr’orks better as a checklist; ancl (3) cspeciallv

cmphasizing ef’fccts front combinarions of psycho-

loeical tendencies.
— Page 55 —

Underline (red), 23 Nov. 2016, 4:40 pm:
Judith Rich Harris

strong-selling book The Nurture Assumption

Underline (red), 23 Nov. 2016, 4:40 pm:
peer pressure on the young is far more important, and

parental nurture is much less important, than had been commonly recognized

Underline (red), 23 Nov. 2016, 4:40 pm:
Oxford.

That great university once allowed ics best student, Samuel Johnson, to leave

without a degree because he was too poor to continue paying tuitio

Underline (red), 23 Nov. 2016, 4:40 pm:
The Nurture Assumption (1998) and No Tlao Alibe (2000.
— Page 56 —

Squiggly underline (red), 23 Nov. 2016, 4:40 pm:
n-rpcrtiner-rt
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