Tuesday, December 11, 2007

The Psychology of Misjudgement

One thing I like about blogging is the discussion and feedback I get(yes - even the negative). It provokes thought. A friend forwarded me a book and article as a result of my December 3rd post on Learn from Everyone.

The famous article by Charlie Munger (Warren Buffett's partner) is "The Psychology of Misjudgement". He is a business philosopher and has written a lot of interesting articles. He admits he is not a psychologist and comments on trying to figure out human behavior. I like the way he has a natural curiosity and tries to figure things out.

Of course the article speaks to me since it applies to all human interaction; especially sales and marketing.

In the article he cites 24 or 25 human tendencies (depending on which version you read) and explains them all in some detail. One of them is Reciprocity Tendency that I wrote about earlier. Others include things like "Social Proof (everyone else is doing it so it must be right", "Overoptimism Tendency", "Twaddle Tendency (The tendency to explain that which cannot be explained or is not understood)", "Curiosity Tendency" etc.

My observation on his 25 tendencies is each of us has each of them to varying degrees and at different times and under different circumstance, they kick in. For example, some people might have a very high curiosity Tendency but be lower than someone else on the Reciprocity Tendency.


At 6:29 PM, Anonymous Anonymous said...

Munger is an interesting cat, after reading his book I'm not sure that I'd like him all that much as he sounds like a grumpier version of my grandfather.

I read his analysis of why Coke is a good product in an investment context and it did sound Peterlynchish and wonderful in hindsight.


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