CHARLES T. MUNGER

The Psychologyof HumanMisjudgment

SELECTIONS FROM THREE OF CHARLIE’S TALKS, COMBINED INTO ONETALK NEVER MADE, AFTER REVISIONS BY CHARLIE IN 2005
THAT INCLUDED CONSIDERABLE NEW MATERIALCHARLES T. MUNGER

The Psychologyof HumanMisjudgment

THE PSYCHOLOGY OF HUMAN MISJUDGMENT

I have long been very interested in standard thinking errors. However, I was educatedin an era wherein the contributions of non-­patient-­treating psychology to an understanding of misjudgment met little approval from members of the mainstream elite.
Instead, interest in psychology was pretty well confined to a group of professors whotalked and published mostly for themselves, with much natural detriment from isolation and groupthink.
And so, right after my time at Caltech and Harvard Law School, I possessed avast ignorance of psychology. Those institutions failed to require knowledge of thesubject. And, of course, they couldn’t integrate psychology with their other subject
matter when they didn’t know psychology. Also, like the Nietzsche character who wasproud of his lame leg, the institutions were proud of their willful avoidance of “fuzzy”
psychology and “fuzzy” psychology professors.
I shared this ignorant mindset for a considerable time, and so did a lot of otherpeople. What are we to think, for instance, of the Caltech course catalog that for years
listed just one psychology professor, self-­described as a “professor of psychoanalytical studies,” who taught both abnormal psychology and psychoanalysis in literature?
Soon after leaving Harvard, I began a long struggle to get rid of the most dysfunctional part of my psychological ignorance. Today, I will describe my long struggle
for elementary wisdom and a brief summary of my ending notions. After that, I will
give examples, many quite vivid and interesting to me, of both psychology at work andantidotes to psychology-­based dysfunction. Then I will end by asking and answeringsome general questions raised by what I have said. This will be a long talk.
When I started law practice, I had respect for the power of genetic evolution andan appreciation of man’s many evolution-­based resemblances to less cognitively giftedanimals and insects. I was aware that man was a social animal, greatly and automatically influenced by behavior he observed in men around him. I also knew that man
lived, like barnyard animals and monkeys, in limited-­size dominance hierarchies,
wherein he tended to respect authority and to like and cooperate with his own hierarchy members while displaying considerable distrust and dislike for competing men
not in his own hierarchy.
But this generalized, evolution-­based theory structure was inadequate to enable
me to cope properly with the cognition I encountered. I was soon surrounded bymuch extreme irrationality, displayed in patterns and subpatterns. So surrounded, I
could see that I was not going to cope as well as I wished with life unless I could
acquire a better theory-­structure on which to hang my observations and experiences.
By then, my craving for more theory had a long history. Partly, I had always loved
theory as an aid in puzzle-­solving and as a means of satisfying my monkey-­like curiosity. And partly, I had found that theory-­structure was a superpower in helping one
get what one wanted, as I had early discovered in school, wherein I had excelled without labor, guided by theory, while many others, without mastery of theory, failed
despite monstrous effort. Better theory, I thought, had always worked for me, and, if
now available, could make me acquire capital and independence faster and better3assist everything I loved. So I slowly developed my own system of psychology, moreor less in the self-­help style of Ben Franklin and with the determination displayed in
the refrain of the nursery story: “‘Then I’ll do it myself,’ said the Little Red Hen.”I was greatly helped in my quest by two turns of mind. First, I had long looked
for insight by inversion in the intense manner counseled by the great algebraist Jacobi:“Invert, always invert.” I sought good judgment mostly by collecting instances of bad
judgment, then pondering ways to avoid such outcomes.
Second, I became so avid a collector of instances of bad judgment that I paid noattention to boundaries between professional territories. After all, why should I searchfor some tiny, unimportant, hard-­to-­find new stupidity in my own field when somelarge, important, easy-­to-­find stupidity was just over the fence in the other fellow’s
professional territory? Besides, I could already see that real-­world problems didn’t
neatly lie within territorial boundaries. They jumped right across. And I was dubiousof any approach that, when two things were inextricably intertwined and interconnected, would try and think about one thing but not the other. I was afraid, if I tried
any such restricted approach, that I would end up, in the immortal words of John L.
Lewis, “with no brain at all, just a neck that had haired over.”Pure curiosity, somewhat later, made me wonder how and why destructive cults
were often able, over a single long weekend, to turn many tolerably normal people into
brainwashed zombies and thereafter keep them in that state indefinitely. I resolvedthat I would eventually find a good answer to this cult question if I could do so by general reading and much musing.
I also got curious about social insects. 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 20 by engaging in one orgy in the sky. The
extreme success of the ants also fascinated me—how a few behavioral algorithms
caused such extreme evolutionary success grounded in extremes of cooperation
within the breeding colony and, almost always, extremes of lethal hostility towardants outside the breeding colony, even ants of the same species.
Motivated as I was, by midlife I should probably have turned to psychology textbooks. But I didn’t, displaying my share of the outcome predicted by the German folk
saying “We are too soon old and too late smart.” However, as I later found out, I may
have been lucky to avoid for so long the academic psychology that was then laid out inmost textbooks. These would not have guided me well with respect to cults and were
often written as if the authors were collecting psychology experiments as a boy collects butterflies—with a passion for more butterflies and more contact with fellow collectors and little craving for synthesis in what is already possessed.
When I finally got to the psychology texts, I was reminded of the observation of
Jacob Viner, the great economist, that many an academic is like the truffle hound, ananimal so trained and bred for one narrow purpose that it is no good at anything else. I
was also appalled by the hundreds of pages of extremely nonscientific musing aboutcomparative weights of nature and nurture in human outcomes. And I found that introductory psychology texts, by and large, didn’t deal appropriately with a fundamental
issue: Psychological tendencies tend to be both numerous and inseparably intertwined,
now and forever, as they interplay in life. Yet the complex parsing out of effects fromintertwined tendencies was usually avoided by the writers of the elementary texts.
Possibly the authors did not wish, through complexity, to repel entry of new
4

devotees to their discipline. And possibly, the cause of their inadequacy was the one
given by Samuel Johnson in response to a woman who inquired as to what accounted
for his dictionary’s mis-­definition of the word “pastern.” “Pure ignorance,” Johnson
replied. Finally, the text writers showed little interest in describing standard antidotes
to standard psychology-­driven folly, and they thus avoided most discussion of exactly
what most interested me.
But academic psychology has some very important merits alongside its defects. I
learned this eventually in the course of general reading from a book, Influence, aimed
at a popular audience by a distinguished psychology professor, Robert Cialdini at Arizona State, a very big university. Cialdini had made himself into a super-­tenured
regents professor at a very young age by devising, describing, and explaining a vastgroup of clever experiments in which man manipulated man to his detriment, with allof this made possible by man’s intrinsic thinking flaws.
I immediately sent copies of Cialdini’s book to all my children. I also gave Cialdini a share of Berkshire stock (Class A) to thank him for what he had done for me andthe public. Incidentally, the sale by Cialdini of hundreds of thousands of copies of abook about social psychology was a huge feat, considering that Cialdini didn’t claimthat he was going to improve your sex life or make you any money.
Part of Cialdini’s large book-­buying audience came because, like me, it wanted tolearn how to become less often tricked by salesmen and circumstances. However, as an
outcome not sought by Cialdini, who is a profoundly ethical man, 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.
With the push given by Cialdini’s book, I soon skimmed through three much-­used textbooks covering introductory psychology. I also pondered considerably whilecraving synthesis and taking into account all my previous training and experience. The
result was Munger’s partial summary of the non-­patient-­treating, non-­nature ­versus­nurture ­weighing parts of non-­developmental psychology. This material was stolen
from its various discoverers (most of whose names I did not even try to learn), oftenwith new descriptions and titles selected to fit Munger’s notion of what makes recall
easy for Munger, then revised to make Munger’s use easy as he seeks to avoid errors.
I will start my summary with a general observation that helps explain what follows. This observation is grounded in what we know about social insects. 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.
Each ant, like each human, is composed of a living physical structure, plus
behavioral algorithms in its nerve cells. In the ant’s case, the behavioral algorithms
are few in number and almost entirely genetic in origin. The ant learns a little behavior
from experiences, but mostly it merely responds to 10 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 cooperatingwith other ants in carrying the dead body out of the hive. Harvard’s great E. O. Wilson5performed one of the best psychology experiments ever done when he painted deadant 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 theentire process. Such is the brain of the ant. It has a simple program of responses thatgenerally work out all right but which are imprudently used by rote in many cases.
Another type of ant demonstrates that the limited brain of ants can be misled bycircumstances as well as by clever manipulation from other creatures. The brain of
this ant contains a simple behavioral program that directs the ant, when walking, tofollow the ant ahead. And when these ants stumble into walking in a big circle, theysometimes walk round and round until they perish.
It seems obvious, to me at least, that the human brain must often operate counterproductively, just like the ant’s, from unavoidable oversimplicity in its mental process, albeit usually in trying to solve problems more difficult than those faced by antsthat don’t have to design airplanes. The perception system of man clearly demonstrates just such an unfortunate outcome. Man is easily fooled, either by the cleverly
thought-­out manipulation of man, by circumstances occurring by accident, or by very
effective manipulation practices that man has stumbled into during “practice evolution” and kept in place because they work so well.
One such outcome is caused by a quantum effect in human perception. If stimulus is kept below a certain level, it does not get through. And for this reason, a magician was able to make the Statue of Liberty “disappear” after a certain amount ofmagician lingo expressed in the dark. The audience was not aware that it was sitting
on a platform that was rotating so slowly, below man’s sensory threshold, that no one
could feel the acceleration implicit in the considerable rotation. When a surrounding
curtain was then opened in the place on the platform where the statue had earlier
appeared, it seemed to have disappeared.
Even when perception does get through to man’s brain, it is often misweighted,
because what is registered in perception is in the shockingness of apparent contrast,
not the standard scientific units that make possible science and good engineering.
A magician demonstrates this sort of contrast-­based error in your nervous system when he removes your wristwatch without your feeling it. As he does this, heapplies pressure of touch on your wrist that you would sense if it was the only pressure of touch you were experiencing. But he has concurrently applied other intensepressure of touch on your body, but not on your wrist, “swamping” the wrist pressure
by creating a high-­contrast touch pressure elsewhere. This high contrast takes thewrist pressure below perception.
Some psychology professors like to demonstrate the inadequacy of contrast-­
based perception by having students put one hand in a bucket of hot water and one
hand in a bucket of cold water. They are then suddenly asked to remove both hands
and place them in a single bucket of room-temperature water. Now, with both handsin the same water, one hand feels as if it has just been put in cold water and the other
hand feels as if it has just been placed in hot water.
When one thus sees perception so easily fooled by mere contrast, where a simple
temperature gauge would make no error, and realizes that cognition mimics perception in being misled by mere contrast, he is well on the way toward understanding not
only how magicians fool one but also how life will fool one. This can occur, throughdeliberate human manipulation or otherwise, if one doesn’t take certain precautions
6

against often wrong effects from generally useful tendencies in his perception andcognition.
Man’s often wrong but generally useful psychological tendencies are quite numerous and quite different. The natural consequence of this profusion of tendencies is the
grand general principle of social psychology: 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.
With this introductory instruction from ants, magicians, and the grand generalprinciple of social psychology, I will next simply number and list psychology-­based
tendencies that, while generally useful, often mislead. Discussion of errors from eachtendency will come later, together with a description of some antidotes to theseerrors, followed by some general discussion.
Here are the tendencies:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Reward-­and punishment-­superresponse tendency
Liking / loving tendency
Disliking / hating tendency
Doubt-­avoidance tendency
Inconsistency-­avoidance tendency
Curiosity tendency
Kantian fairness tendency
Envy / jealousy tendency
Reciprocation tendency
Influence-­from-­mere-­association tendency
Simple, pain-­avoiding psychological denial
Excessive self-­regard tendency
Overoptimism tendency
Deprival-­superreaction tendency
Social-­proof tendency
Contrast-­misreaction tendency
Stress-­influence tendency
Availability-­misweighing tendency
Use-­it-­or-­lose-­it tendency
Drug-­misinfluence tendency
Senescence-­misinfluence tendency
Authority-­misinfluence tendency
Twaddle tendency
Reason-­respecting tendency
Lollapalooza tendency—the tendency to get extreme consequences fromconfluences of psychological tendencies acting in favor of a particularoutcome7

ONE
Reward-­and punishment-­superresponse tendency
I place this tendency first in my discussion because almost everyone thinks he fullyrecognizes how important incentives and disincentives are in changing cognition andbehavior. But this is not often so. For instance, I think I’ve been in the top 5 percent of
my age cohort almost all my adult life in understanding the power of incentives, yet
I’ve always underestimated that power. Never a year passes but I get some surprisethat pushes a little further my appreciation of incentive superpower.
One of my favorite cases about the power of incentives is the Federal Express
case. The integrity of the Federal Express system requires that all packages be shifted
rapidly among airplanes in one central airport each night. The system has no integrity
for the customers if the night work shift can’t accomplish its assignment fast. And
Federal Express had one hell of a time getting the night shift to do the right thing.
They tried moral suasion. They tried everything in the world without luck. And finally,
somebody got the happy thought that it was foolish to pay the night shift by the hourwhen what the employer wanted was not maximized billable hours of employee service but fault-­
free, rapid performance of a particular task. Maybe, this person
thought, if they paid the employees per shift and let all night shift employees go homewhen all the planes were loaded, the system would work better. And, lo and behold,that solution worked.
Early in the history of Xerox, Joe Wilson, who was then in the government, had asimilar experience. He had to go back to Xerox because he couldn’t understand why its
new machine was selling so poorly in relation to its older and inferior machine. Whenhe got back to Xerox, he found out that the commission arrangement with the salesmen gave a large and perverse incentive to push the inferior machine on customers,
who deserved a better result.
Then there is the case of Mark Twain’s cat that, after a bad experience with a
hot stove, never again sat on a hot stove, or a cold stove either.
We should also heed the general lesson implicit in the injunction of Ben Franklin
in Poor Richard’s Almanack: “If you would persuade, appeal to interest and not toreason.”This maxim is a wise guide to a great and simple precaution in life: Never, ever,think about something else when you should be thinking about the power of incentives. I once saw a very smart house counsel for a major investment bank lose his job,with no moral fault, because he ignored the lesson in this maxim of Franklin. This
counsel failed to persuade his client because he told him his moral duty, as correctly
conceived by the counsel, without also telling the client in vivid terms that he wasvery likely to be clobbered to smithereens if he didn’t behave as his counsel recommended. As a result, both client and counsel lost their careers.
We should also remember how a foolish and willful ignorance of the superpowerof 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 mostimportant rule in management is “Get the incentives right.”
But there is some limit to a desirable emphasis on incentive superpower. One
case of excess emphasis happened at Harvard, where B. F. Skinner, a psychology professor, finally made himself ridiculous. At one time, Skinner may have been the8

best-­known psychology professor in the world. He partly deserved his peak reputation
because his early experiments using rats and pigeons were ingenious, and his results
were both counterintuitive and important. With incentives, he could cause more
behavior change, culminating in conditioned reflexes in his rats and pigeons, than hecould in any other way. He made obvious the extreme stupidity, in dealing with children or employees, of rewarding behavior one didn’t want more of. Using food rewards,
he even caused strong superstitions, predesigned by himself, in his pigeons. He demonstrated, again and again, a great recurring generalized behavioral algorithm in nature:“Repeat behavior that works.”
He also demonstrated that prompt rewards worked much better than delayed
rewards in changing and maintaining behavior. And once his rats and pigeons had
conditioned reflexes caused by food rewards, he found what withdrawal pattern of
rewards kept the reflexive behavior longest in place: random distribution. With thisresult, Skinner thought he had pretty well explained man’s misgambling compulsion,
whereunder he often foolishly proceeds to ruin. But as we shall later see when we discuss other psychological tendencies that contribute to misgambling compulsion, he
was only partly right.
Later, Skinner lost most of his personal reputation by 1) overclaiming for incentive superpower, to the point of thinking he could create a human utopia with it, and
2) displaying hardly any recognition of the power of the rest of psychology. He thus
behaved like one of Jacob Viner’s truffle hounds as he tried to explain everything withincentive effects.
Nonetheless, Skinner was right in his main idea: Incentives are superpowers.
The outcome of his basic experiments will always remain in high repute in the annalsof experimental science.
When I was at Harvard Law School, the professors sometimes talked about an
overfocused, Skinner-­like professor at Yale Law School. They used to say, “Poor old
Eddie Blanchard, he thinks declaratory judgments will cure cancer.” Well, that’s theway Skinner got with his very extreme emphasis on incentive superpower. I always
call the Johnny-­one-­note turn of mind that eventually so diminished Skinner’s reputation the “man-­with-­a-­hammer tendency,” after the folk saying “To a man with only
a hammer, every problem looks pretty much like a nail.”Man-­with-­a-­hammer tendency does not exempt smart people like Blanchard andSkinner. And it won’t exempt you if you don’t watch out. I will return to man-­with-­a-­hammer tendency at various times in this talk because, fortunately, there are effective
antidotes that reduce the ravages of what pretty much ruined the personal reputationof the brilliant Skinner.
One of the most important consequences of incentive superpower is what I callincentive-­caused bias. A man has an acculturated nature, making him a pretty decent
fellow, and yet, driven both consciously and subconsciously by incentives, he drifts
into immoral behavior in order to get what he wants—a result he facilitates by rationalizing his bad behavior, like the salesmen at Xerox who harmed customers in orderto maximize their sales commissions.
Here, my early education involved a surgeon who, over the years, sent bushel baskets full of normal gallbladders down to the pathology lab in the leading hospital in
Lincoln, Nebraska, my grandfather’s town. And, with that permissive quality control
for which community hospitals are famous, many years after this surgeon should’ve
9been removed from the medical staff, he was.
One of the doctors who participated in the removal was a family friend, and I
asked him, “Did this surgeon think, ‘Here’s a way for me to exercise my talents’”—thisguy was very skilled technically—“‘and make a high living by doing a few maimings
and murders every year in the course of routine fraud?’” And my friend answered,“Hell no, Charlie. He thought that the gallbladder was the source of all medical evil,
and if you really loved your patients, you couldn’t get that organ out rapidly enough.”Now, that’s an extreme case, but in lesser strength, the cognitive drift of that surgeon is present in every profession and in every human being. And it causes perfectly
terrible behavior. Consider the presentations of brokers selling commercial real estateand businesses. I’ve never seen one that I thought was even within hailing distance ofobjective truth. In my long life, I have never seen a management consultant’s reportthat didn’t end with the same advice: “This problem needs more management consulting services.”
Widespread incentive-­caused bias requires that one should often distrust or takewith a grain of salt the advice of one’s professional adviser, even if he is an engineer.
The general antidotes here are: 1) Especially fear professional advice when it is especially good for the adviser, 2) learn and use the basic elements of your adviser’s tradeas you deal with your adviser, and 3) double-check, disbelieve, or replace much ofwhat you’re told, to the degree that seems appropriate after objective thought.
The power of incentives to cause rationalized terrible behavior is also demonstrated by Defense Department procurement history. After the Defense Department
had much truly awful experience with misbehaving contractors motivated under contracts paying on a cost-­plus-­percentage ­of ­cost basis, the reaction of our republic was
to make it a crime for a contracting officer in the Defense Department to sign such acontract—and not only a crime but a felony. And by the way, although the government
was right to create this new felony, much of the way the rest of the world is run, including the operation of many law firms and a lot of other firms, is still under what is, inessence, a cost-­plus-­percentage ­of ­cost reward system.
Human nature, bedeviled by incentive-­caused bias, causes a lot of ghastly abuse
under these standard incentive patterns of the world. And many of the people who are
behaving terribly you would be glad to have married into your family, compared towhat you’re otherwise likely to get.
Now, there are huge implications from the fact that the human mind is put
together this way. One implication is that people who create things like cash registers,
which make dishonest behavior hard to accomplish, are some of the effective saints ofour civilization because, as Skinner so well knew, bad behavior is intensely habit-­forming when it is rewarded. And so the cash register was a great moral instrument
when it was created.
And by the way, Patterson, the great evangelist of the cash register, knew thatfrom his own experience. He had a little store, and his employees were stealing him
blind, so that he never made any money. Then people sold him a couple of cash registers, and his store went to profit immediately. He promptly closed the store and went
into the cash register business, creating what became the mighty National Cash Register company, one of the glories of its time.
“Repeat behavior that works” is a behavioral guide that really succeeded for Patterson, after he applied one added twist. So did high moral cognition. An eccentric,
10

inveterate do-­gooder (except when destroying competitors, all of which he regarded
as would-­be patent thieves), Patterson, like Carnegie, pretty well gave away all his
money to charity before he died, always pointing out that “shrouds have no pockets.”
So great was the contribution of Patterson’s cash register to civilization, and so effectively did he improve the cash register and spread its use, that in the end, he probably
deserved the epitaph chosen for the Roman poet Horace: “I did not completely die.”
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. Perhaps the most important of these antidotes is the use of sound accounting
theory and practice. This was seldom better demonstrated than at Westinghouse,
which had a subsidiary that made loans having no connection to the rest of Westinghouse’s businesses. The officers of Westinghouse, perhaps influenced by envy of General Electric, wanted to expand profits from loans to outsiders. Under Westinghouse’s
accounting practice, provisions for future credit losses on these loans depended largelyon the past credit experience of its lending subsidiary, which mainly made loans unlikely to cause massive losses.
Now, there are two special classes of loans that naturally cause much trouble forlenders. The first is 95 p
­ ercent-­of-­value construction loans to any kind of real estatedeveloper, and the second is any kind of construction loan on a hotel. So, naturally, if
one was willing to loan approximately 95 percent of the real cost to a developer constructing a hotel, the loan would bear a much higher than normal interest rate
because the credit loss danger would be much higher than normal. So, soundaccounting for Westinghouse in making a big, new mass of 95 p
­ ercent-­of-­value construction loans to hotel developers would have been to report almost no profit, oreven a loss, on each loan until, years later, the loan became clearly worth par.
But Westinghouse instead plunged into big-­time construction lending on hotels,
using accounting that made its lending officers look good because it showed
extremely high starting income from loans that were very inferior to the loans fromwhich the company had suffered small credit losses in the past. This terrible
accounting was allowed by both international and outside accountants for Westinghouse as they displayed the conduct predicted by the refrain “Whose bread I eat, hissong I sing.” The result was billions of dollars of losses.
Who was at fault? The guy from the refrigerator division, or some similar division, who as lending officer was suddenly in charge of loans to hotel developers? Or
the accountants and other senior people who tolerated a nearly insane incentive
structure, almost sure to trigger incentive-­caused bias in a lending officer? My answer
puts the most blame on the accountants and other senior people who created theaccounting system. These people became the equivalent of an armored car cash-­carrying service that suddenly decided to dispense with vehicles and have unarmed
children hand-carry its customers’ cash through slums in open bushel baskets.
I wish I could tell you that this sort of thing no longer happens, but this is not
so. After Westinghouse blew up, General Electric’s Kidder, Peabody subsidiary put asilly computer program in place that allowed a bond trader to show immense fictional profits. And after that, much accounting became even worse, perhaps reaching its
nadir at Enron.
So incentive-­caused bias is a huge, important thing, with highly important antidotes, like the cash register and a sound accounting system. But when I came years
11ago to the psychology texts, I found that, while they were about 1,000 pages long,
there was little therein that dealt with incentive-­caused bias and no mention of Patterson or sound accounting systems.
Somehow incentive-­caused bias and its antidotes pretty well escaped the standard
survey courses in psychology, even though incentive-­caused bias had long been displayed prominently in much of the world’s great literature, and antidotes to it had longexisted in standard business routines. In the end, I concluded that when something was
obvious in life but not easily demonstrable in certain kinds of easy-­to-­do, repeatable
academic experiments, the truffle hounds of psychology very often missed it.
In some cases, other disciplines showed more interest in psychological tendencies than did psychology, at least as explicated in psychology textbooks. For instance,
economists, speaking from the employer’s point of view, have long had a name for thenatural results of incentive-­caused bias: agency cost.
As the name implies, economists have typically known that, just as grain is
always lost to rats, employers always lose to employees who improperly think of themselves first. Employer-­installed antidotes include tough internal audit systems andsevere public punishment for identified miscreants, as well as misbehavior-­preventing
routines and such machines as cash registers. From the employee’s point of view,
incentive-­caused bias quite naturally causes opposing abuse from the employer: thesweatshop, the unsafe workplace, etc. And these bad results for employees have antidotes not only in pressure from unions but also in government action, such as wage
and hour laws, workplace safety rules, measures fostering unionization, and workers’
compensation systems. Given the opposing psychology-­induced strains that naturally
occur in employment because of incentive-­caused bias on both sides of the relationship, it is no wonder the Chinese are so much into yin and yang.
The inevitable ubiquity of incentive-­caused bias has vast, generalized consequences. For instance, a sales force living only on commissions will be much harder tokeep moral than one under less pressure from the compensation arrangement. On theother 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.
The extreme success of free-­market capitalism as an economic system owes
much to its prevention of many bad effects from incentive-­caused bias. Most capitalist owners in a vast web of free-­market economic activity are selected for ability bysurviving in a brutal competition with other owners and have a strong incentive toprevent all waste in operations within their ownership. After all, they live on the difference between their competitive prices and their overall costs, and their businesses
will perish if costs exceed sales. Replace such owners by salaried employees of thestate and you will normally get a substantial reduction in overall efficiency, as each
employee who replaces an owner is subject to incentive-­caused bias as he determines
what service he will give in exchange for his salary and how much he will yield to peerpressure from many fellow employees who do not desire his creation of any strong
performance model.
Another generalized consequence of incentive-­caused bias is that man tends togame all human systems, often displaying great ingen­uity in wrongly serving himself
at the expense of others. Anti-­gaming features, therefore, constitute a huge and necessary part of almost all system design.
12

Also needed in system design is an admonition: Dread, and avoid as much you
can, rewarding people for what can be easily faked. Yet our legislators and judges, usually including many lawyers educated in eminent universities, often ignore this injunction. Society consequently pays a huge price in the deterioration of behavior andefficiency, as well as the incurrence of unfair costs and wealth transfers. If education
were improved, with psychological reality becoming better taught and assimilated,better system design might well come out of our legislatures and courts.
Of course, money is now the main reward that drives habits. A monkey can betrained to seek and work for an intrinsically worthless token as if it were a banana if
the token is routinely exchangeable for a banana. So it is with humans working formoney, only more so, because human money is exchangeable for many desired thingsin addition to food, and one ordinarily gains status from either holding or spending it.
Moreover, a rich person will often, through habit, work or connive energetically formore money long after he has almost no real need for more. Averaged out, money is amainspring of modern civilization, having little precedent in the behavior of nonhuman animals. Money rewards are also intertwined with other forms of reward. For
instance, some people use money to buy status, and others use status to get money,
while still others sort of do both things at the same time.
Although money is the main driver among rewards, it is not the only reward thatworks. People also change their behavior and cognition for sex, friendship, companionship, advancement in status, and other nonmonetary items.
“Granny’s rule” provides another example of reward superpower, so extreme inits effects that it must be mentioned here. You can successfully manipulate your own
behavior with this rule, even if you are using as rewards items that you already possess! Indeed, consultant PhD psychologists often urge business organizations toimprove their reward systems by teaching executives to use “granny’s rule” to govern
their own daily behavior.
Granny’s rule, to be specific, is the requirement that children eat their carrots
before they get dessert. The business version requires that executives force themselves daily to first do their unpleasant and necessary tasks before rewarding themselves by proceeding to their pleasant tasks. Given reward superpower, this practice iswise and sound. Moreover, the rule can also be used in the non-­business part of life.
The emphasis on daily use of this practice is not accidental. The consultants wellknow, after the teaching of Skinner, that prompt rewards work best.
Punishments, of course, also strongly influence behavior and cognition, although
not so flexibly and wonderfully as rewards. For instance, illegal price fixing was fairly
common in America when it was customarily punished by modest fines. Then, after a
few prominent business executives were removed from their eminent positions andsent to federal prisons, price-­fixing behavior was greatly reduced.
Military and naval organizations have very often been extreme in using punishment to change behavior, probably because they needed to cause extreme behavior.
Around the time of Caesar, there was a European tribe that, when the assembly horn
blew, always killed the last warrior to reach his assigned place, and no one enjoyedfighting this tribe. And George Washington hanged farm-­boy deserters 40 feet high as
an example to others who might contemplate desertion.

13

TWO
Liking/loving tendency
A newly hatched baby goose is programmed, through the economy of its genetic program, to love and follow the first creature that is nice to it, which is almost always its
mother. But if the mother goose is not present right after the hatching and a man isthere instead, the gosling will love and follow the man, who becomes a sort of substitute mother.
Somewhat similarly, a newly arrived human is born to like and love under thenormal and abnormal triggering outcomes for its kind. Perhaps the strongest inborntendency to love, ready to be triggered, is that of the human mother for its child. On
the other hand, the similar child-­loving behavior of a mouse can be eliminated by thedeletion of a single gene, which suggests there is some sort of triggering gene in amother mouse as well as in a gosling.
Each child, like a gosling, will almost surely come to like and love, not only as
driven by its sexual nature but also in social groups not limited to its genetic or adoptive family. Current extremes of romantic love almost surely did not occur in man’s
remote past. Our early human ancestors were surely more like apes triggered intomating in a pretty mundane fashion.
And 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. So many a courtship competition will be won by a person displaying exceptional devotion, and 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 to 1) ignore the faults of, and comply
with the wishes of, the object of his affection; 2) 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) 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.
Liking or loving, intertwined with admiration in a feedback mode, often has vastpractical consequences in areas far removed from sexual attachments. For instance, aman who is so constructed that he loves admirable persons and ideas with a special
intensity has a huge advantage in life. This blessing came to both Buffett and myself inlarge measure, sometimes from the same persons and ideas. One common beneficial
example for us both was Warren’s uncle, Fred Buffett, who cheerfully did the endlessgrocery store work that Warren and I ended up admiring from a safe distance. Even
now, after I have known so many other people, I doubt it is possible to be a nicer man
than Fred Buffett was, and he changed me for the better.
There are large social policy implications in the amazingly good consequencesthat 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 toattract a lot of lovable, admirable people into the teaching profession.

14

THREE
Disliking/hating tendency
In a pattern obverse to liking/loving tendency, the newly arrived human is also born todislike and hate, as triggered by normal and abnormal triggering forces in its life. It is
the same with most apes and monkeys. As a result, the long history of man contains
almost continuous war. For instance, most American Indian tribes warred incessantly,
and some tribes would occasionally bring captives home to women so that all could
join in the fun of torturing captives to death. Even with the spread of religion and theadvent of advanced civilization, much modern war remains pretty savage. But we also
get what we observe in present-­day Switzerland and the United States, wherein theclever political arrangements of man channel the hatreds and dislikings of individuals
and groups into nonlethal patterns, including elections.
But the dislikings and hatreds never go away completely. Born into man, thesedriving tendencies remain strong. Thus, we get maxims like the one from England:“Politics is the art of marshaling hatreds.” And we also get the extreme popularity ofvery negative political advertising in the United States.
At the family level, we often see one sibling hate his other siblings and litigate
with them endlessly if he can afford it. Indeed, a wag named Buffett has repeatedly
explained to me that “a major difference between rich and poor people is that the richpeople can spend their lives suing their relatives.” My father’s law practice in Omaha
was full of such intra-family hatreds. When I got to the Harvard Law School and its
professors taught me property law with no mention of sibling rivalry in the familybusiness, I appraised the school as a pretty unrealistic place that wore blinders likethe milk-­wagon horses of yore. My current guess is that sibling rivalry has not yet
made it into property law as taught at Harvard.
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 otherfacts to facilitate hatred.

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 indeciding what to do. So man’s doubt-­avoidance tendency is quite consistent with thehistory of his ancient, nonhuman ancestors.
So pronounced is the tendency in man to quickly remove doubt by reachingsome decision that behavior to counter the tendency is required from judges andjurors. Here, delay before decision-­making is forced, and one is required to comporthimself, prior to conclusion time, so that he is wearing a “mask” of objectivity. And
the mask works to help real objectivity along, as we shall see when we next consider
15

man’s inconsistency-­avoidance tendency.
Of course, once one has recognized that man has a strong doubt-­avoidance tendency, it is logical to believe that at least some leaps of religious faith are greatly
boosted by this tendency. Even if one is satisfied that his own faith comes from revelation, one must still account for the inconsistent faiths of others. And man’s doubt-­
avoidance tendency is almost surely a big part of the answer.
What triggers doubt-­avoidance tendency? Well, an unthreatened man, thinking
of nothing in particular, is not being prompted to remove doubt through rushing
to some decision. As we shall see later when we get to social-­proof tendency andstress-­influence tendency, what usually triggers doubt-­avoidance tendency is somecombination of 1) puzzlement and 2) stress. And both of these factors naturally occur
in facing religious issues. Thus, the natural state of most men is in some form of religion. And this is what we observe.

FIVE
Inconsistency-­avoidance tendency
The brain of man conserves programming space by being reluctant to change, which
is a form of inconsistency avoidance. We see this in all human habits, constructive
and destructive. Few people can list a lot of bad habits that they have eliminated, andsome people cannot identify even one of these. Instead, practically everyone has agreat 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 [in A Christmas Carol] says, “I wear
the chains I forged in life,” he is talking about the chains of habit that were too light tobe 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. 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 itmuch easier to prevent a habit than to change it.
Also tending to be maintained in place by the anti-­change tendency of the brain
are one’s previous conclusions, human loyalties, reputational identity, commitments,
accepted role in a civilization, etc. 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 wasalways 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.
16

It is easy to see that a quickly reached conclusion, triggered by doubt-­avoidance
tendency, when combined with a tendency to resist any change in that conclusion,
will naturally cause a lot of errors in cognition for modern man. And so it observably
works out. We all deal much with others whom we correctly diagnose as imprisonedin poor conclusions that are maintained by mental habits they formed early and will
carry to their graves.
So great is the bad-­decision problem caused by inconsistency-­avoidance tendency that our courts have adopted important strategies against it. For instance, before
making decisions, judges and juries are required to hear long and skillful presentations of evidence and arguments from the side they will not naturally favor, given theirideas in place. This helps prevent considerable bad thinking from first-­conclusion
bias. Similarly, other modern decision-­makers will often force groups to consider
skillful counterarguments before making decisions.
Proper education is one long exercise in the augmentation of high cognition sothat our wisdom becomes strong enough to destroy wrong thinking maintained byresistance to change. As Lord Keynes pointed out about his exalted intellectual groupat one of the greatest universities in the world, 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 humanegg. When one sperm gets into a human egg, there’s an automatic shut-­off device thatbars any other sperm from getting in. The human mind tends strongly toward thesame sort of result. And so, people tend to accumulate large mental holdings of fixed
conclusions and attitudes that are not often reexamined or changed, even though
there is plenty of good evidence that they are wrong.
Moreover, this doesn’t just happen in social science departments, like the onethat once thought Freud should serve as the only choice as a psychology teacher for
Caltech. Holding to old errors even happens, although with less frequency and severity,
in hard science departments. We have no less an authority for this than Max Planck,Nobel laureate, finder of Planck’s constant. Planck is famous not only for his sciencebut also for saying that even in physics the radically new ideas are seldom really
accepted by the old guard. Instead, said Planck, progress is made by a new generationthat comes along, less brain-­blocked by its previous conclusions.
Indeed, precisely this sort of brain b­ locking happened to a degree in Einstein. At
his peak, Einstein was a great destroyer of his own ideas, but an older Einstein neveraccepted the full implications of quantum mechanics.
One of the most successful users of an antidote to first-­conclusion bias wasCharles 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. The opposite of what Darwin did is now called confirmation bias, aterm of opprobrium. Darwin’s practice came from his acute recognition of man’s natural cognitive faults arising from inconsistency-­avoidance tendency. He provides a great
example of psychological insight correctly used to advance some of the finest mental
work ever done.
Inconsistency-­
avoidance tendency has many good effects in civilization. For
instance, rather than act inconsistently with public commitments, new or old public
identities, etc., most people are more loyal in their roles in life as priests, physicians,
17

citizens, soldiers, spouses, teachers, employees, etc.
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. After all, it would be quite inconsistent behavior to make a large sacrifice forsomething that was no good. Thus civilization has invented many tough and solemn
initiation ceremonies, often public in nature, that intensify new commitments made.
Tough initiation ceremonies can intensify bad conduct as well as good. The loyalty of the new made-­man mafia member or of the military officer making the required
blood oath of loyalty to Hitler was boosted through the triggering of inconsistency-­
avoidance tendency.
Moreover, the tendency will often make man a patsy of manipulative compliancepractitioners, who gain advantage from triggering his subconscious inconsistency-­
avoidance tendency. Few people demonstrated this process better than 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 non-­admired and non-­trusted Franklin would beinconsistent with the appraisal implicit in lending Franklin the book.
During the Korean War, this technique of Franklin’s was the most important feature of the Chinese brainwashing system that was used on enemy prisoners. Small
step by small step, the technique often worked better than torture in altering prisoner
cognition in favor of Chinese captors.
The practice of Franklin, whereunder he got approval from someone by maneuvering him into treating Franklin favorably, works viciously well in reverse. When one
is maneuvered into deliberately hurting some other person, one will tend to disapprove of or even hate that person. This effect, from inconsistency-­avoidance tendency,
accounts for the insight implicit in the saying “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.
Given the psychology-­based hostility natural in prisons between guards andprisoners, an intense, continuous effort should be made to 1) prevent prisoner abusefrom starting and 2) stop it instantly when it starts, because it will grow by feeding on
itself, like a cluster of infectious disease. More psychological acuity on this subject,aided by more insightful teaching, would probably improve the overall effectivenessof the US Army.
So strong is inconsistency-­avoidance tendency that it will often prevail after one
has merely pretended to have some identity, habit, or conclusion. Thus, for a while,
many an actor sort of believes he is Hamlet, prince of Denmark. And many a hypocrite is improved by his pretensions of virtue. And many a judge and juror, while pretending objectivity, is gaining objectivity. And many a trial lawyer or other advocate
comes to believe what he formerly only pretended to believe.
While inconsistency-­
avoidance tendency, with its status quo bias, immensely
harms sound education, it also causes much benefit. For instance, a near-­ultimate
inconsistency would be to teach something to others that one did not believe true. So inclinical medical education, the learner is forced to “see one, do one, then teach one,”with the teaching pounding the learning into the teacher. Of course, the power of18

teaching to influence the cognition of the teacher is not always a benefit to society.
When such power flows into political and cult evangelism, there are often bad
consequences.
For instance, modern education often does much damage when young students
are taught dubious political notions and then enthusiastically push these notions on
the rest of us. The pushing seldom convinces others. But as students pound into theirmental habits what they are pushing out, the students are often permanently damaged.
Educational institutions that create a climate where much of this goes on are, I think,irresponsible. It is important not to thus put one’s brain in chains before one has comeanywhere near his full potentiality as a rational person.

SIX
Curiosity tendency
There is a lot of innate curiosity in mammals, but its nonhuman version is highest
among apes and monkeys. Man’s curiosity, in turn, is much stronger than that of his
simian relatives.
In advanced human civilization, culture greatly increases the effectiveness ofcuriosity in advancing knowledge. For instance, Athens (including its colony, Alexandria) developed much math and science out of pure curiosity, while the Romans madealmost no contribution to either math or science. They instead concentrated theirattention on the “practical” engineering of mines, roads, aqueducts, etc.
Curiosity, enhanced by the best of modern education—which is, by definition, aminority part in many places—much helps man to prevent or reduce bad consequences
arising from other psychological tendencies. The curious are also provided with muchfun and wisdom long after formal education has ended.

SEVEN
Kantian fairness tendency
Kant was famous for his categorical imperative, a sort of golden rule that required
humans to follow those behavior patterns that, if followed by all others, would makethe surrounding human system work best for everybody. It is not too much to say thatmodern acculturated man displays, and expects from others, a lot of fairness as thus
defined by Kant.
In a small community having a one-­way bridge or tunnel for autos, it is the normin the United States to see a lot of reciprocal courtesy, despite the absence of signs or
signals. And many freeway drivers, including myself, will often let other drivers comein front of them, in lane changes or the like, because that is the courtesy they desire
when roles are reversed. Moreover, there is in modern human culture a lot of courteous lining up by strangers so that all are served on a first-­come-­first-­served basis.
Also, strangers often voluntarily share equally in unexpected, unearned good and bad
fortune. And, as an obverse consequence of such fair-­sharing conduct, much reactive
hostility occurs when fair sharing is expected yet not provided.
It is interesting how the world’s slavery was pretty well abolished during the last19

three centuries after being tolerated for a great many previous centuries, during
which it coexisted with the world’s major religions. My guess is that Kantian fairness
tendency was a major contributor to this result.

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 isgoing to occur often and will tend to create some conflict when the food is seen in thepossession of another member of the same species. This is probably the evolutionary
origin of the envy/jealousy tendency that lies so deep in human nature.
Sibling jealousy is clearly very strong and usually greater in children than adults.
It is often stronger than jealousy directed at strangers. Kantian fairness tendency
probably contributes to this result.
Envy/jealousy is extreme in myth, religion, and literature, wherein, in accountafter account, it triggers hatred and injury. It was regarded as so pernicious by theJews of the civilization that preceded Christ that it was forbidden, by phrase after
phrase, in the laws of Moses. You were even warned by the prophet not to covet yourneighbor’s donkey.
Envy/jealousy is also extreme in modern life. For instance, university communities often go bananas when some university employee in money management or some
professor in surgery gets annual compensation in multiples of the standard professorial salary. And in modern investment banks, law firms, etc., the envy/jealousy effects
are usually more extreme than they are in university faculties. Many big law firms,
fearing disorder from envy/jealousy, have long treated all senior partners alike in compensation, no matter how different their contributions to firm welfare. As I haveshared the observation of life with Warren Buffett over decades, I have heard him
wisely say on several occasions, “It is not greed that drives the world but envy.”
Because this is roughly right, one would expect a vast coverage of envy/jealousy
in psychology textbooks. But no such vast coverage existed when I read my three textbooks. Indeed, the very words “envy” and “jealousy” were often absent from indexes.
Non-­discussion of envy/jealousy is not a phenomenon confined to psychology
texts. When did any of you last engage in any large group discussion of some issue
wherein adult envy/jealousy was identified as the cause of someone’s argument?
There seems to be a general taboo against any such claim. If so, what accounts forthe taboo?
My guess is that people widely and generally sense that 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. And if calling a
position envy-­driven is perceived as the equivalent of describing its holder as a childish mental basket case, then it is quite understandable how a general taboo has arisen.
But should this general taboo extend to psychology texts when it creates such a large
gap in the correct psychological explanation of what is widespread and important? Myanswer is no.

20

NINE
Reciprocation tendency
The automatic tendency of humans to reciprocate both favors and disfavors has long
been noticed as extreme, as it is in apes, monkeys, dogs, and many less cognitively
gifted animals. The tendency clearly facilitates group cooperation for the benefit ofmembers. In this respect, it mimics much genetic programming of the social insects.
We see the extreme power of the tendency to reciprocate disfavors in some wars,
wherein it increases hatred to a level causing very brutal conduct. For long stretches inmany wars, no prisoners were taken, the only acceptable enemy being a dead one. And
sometimes that was not enough, as in the case of Genghis Khan, who was not satisfied
with corpses. He insisted on their being hacked into pieces.
One interesting mental exercise is to compare Genghis Khan, who exercised
extreme, lethal hostility toward other men, with ants that display extreme, lethal hostility toward members of their own species that are not part of their breeding colony.
Genghis looks sweetly lovable when compared to the ants. The ants are more disposed to fight, and fight with more extreme cruelty. Indeed, E. O. Wilson once waggishly suggested that if ants were suddenly to get atom bombs, all ants would be deadwithin 18 hours.
What both human and ant history suggest is that 1) nature has no general algorithm making intraspecies, turn-­the-­other-­cheek behavior a booster of species survival; 2) 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-­cheekbehavior is a good idea for a country as it deals with outsiders, man’s culture is goingto have to do a lot of heavy lifting because his genes won’t be of much help.
I next turn to man’s reciprocated hostility that falls well short of war. Peacetime
hostility can be pretty extreme, as in many modern cases of road rage or injury-­
producing temper tantrums on athletic fields. The standard antidote to one’s overactive hostility is to train oneself to defer reaction. As my smart friend Tom Murphy sofrequently says, “You can always tell the man off tomorrow, if it is such a good idea.”
Of course, the tendency to reciprocate favor for favor is also very intense, somuch so that it occasionally reverses the course of reciprocated hostility. Weird pauses
in fighting have sometimes occurred right in the middle of wars, triggered by someminor courtesy or favor on the part of one side, followed by favor reciprocation fromthe other side, and so on, until fighting stopped for a considerable period. This happened more than once in the trench warfare of World War I, over big stretches of thefront and much to the dismay of the generals.
It is obvious that commercial trade, a fundamental cause of modern prosperity,
is enormously facilitated by man’s innate tendency to reciprocate favors. In trade,enlightened self-­interest joining with reciprocation tendency results in constructive
conduct. Daily interchange in marriage is also assisted by reciprocation tendency,
without which marriage would lose much of its allure.
Reciprocation tendency, insomuch as it causes good results, does not join forces
only with the superpower of incentives. It also joins inconsistency-­avoidance tendency in helping cause 1) the fulfillment of promises made as part of a bargain, including loyalty promises in marriage ceremonies; and 2) correct behavior expected frompersons serving as priests, shoemakers, physicians, and all else.
21Like other psychological tendencies, and also man’s ability to turn somersaults,
reciprocate-favor tendency operates to a very considerable degree at a subconscious
level. This helps make the tendency a strong force that can sometimes be used by somemen to mislead others, which happens all the time. For instance, when an automobile
salesman graciously steers you into a comfortable place to sit and gives you a cup ofcoffee, you are very likely being tricked, by this small courtesy alone, into parting withan extra $500. This is far from the most extreme case of sales success that is rooted ina salesman dispensing minor favors. However, in this scenario of buying a car, you aregoing to be disadvantaged by parting with an extra $500 of your own money. Thispotential loss will protect you to some extent.
But suppose you are the purchasing agent of someone else—a rich employer, forinstance. Now, the minor favor you receive from the salesman is less opposed by thethreat of extra cost to you because someone else is paying the extra cost. Under suchcircumstances, the salesman is often able to maximize his advantage, particularly
when the government is the purchaser.
Wise employers, therefore, try to oppose the 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. Given the subconscious
level at which much reciprocation tendency operates, this policy of Walton’s was profoundly correct. If I controlled the Defense Department, its policies would mimic
Walton’s.
In a famous psychology experiment, Cialdini brilliantly demonstrated the powerof compliance practitioners to mislead people by triggering their subconscious reciprocation tendency. Carrying out this experiment, Cialdini caused his compliance practitioners to wander around his campus and ask strangers to supervise a bunch ofjuvenile delinquents on a trip to a zoo. Because this happened on a campus, one person in six out of a large sample actually agreed to do this. After accumulating this1-­
in-6 statistic, Cialdini changed his procedure. His practitioners next wanderedaround the campus asking strangers to devote a big chunk of time every week for two
years to the supervision of juvenile delinquents. This ridiculous request got him a 100
percent rejection rate. But the practitioner had a follow-­up question: “Will you at least
spend one afternoon taking juvenile delinquents to a zoo?” This raised Cialdini’s former acceptance rate of 1 in 6 to 1 in 2—a tripling.
What Cialdini’s compliance practitioners had done was make a small concession,
which was reciprocated by a small concession from the other side. This subconscious
reciprocation of a concession by Cialdini’s experimental subjects actually caused amuch-­increased percentage of them to end up irrationally agreeing to go to a zoo withjuvenile delinquents. Now, a professor who can invent an experiment like that, which so
powerfully demonstrates something so important, deserves much recognition in thewider world, which he indeed got, to the credit of many universities that learned agreat deal from Cialdini.
Why is reciprocation tendency so important? Well, consider the folly of having
law students graduate and go out in the world representing clients in negotiations, notknowing the nature of the subconscious processes of the mind as exhibited in Cialdini’s experiment. Yet such folly was prevalent in the law schools of the world for22decades, in fact generations. The correct name for that is educational malpractice. The
law schools didn’t know, or care to teach, what Sam Walton so well knew.
The importance and power of reciprocate-favor tendency was also demonstrated
in Cialdini’s explanation of the foolish decision of the attorney general of the UnitedStates to authorize the Watergate burglary. There, an aggressive subordinate madesome extreme proposal for advancing Republican interests through the use of somecombination of whores and a gigantic yacht. When this ridiculous request was rejected,
the subordinate backed off, in gracious concession, to merely asking for consent to aburglary, and the attorney general went along. 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. Reciprocation tendency
subtly causes many extreme and dangerous consequences, not just on rare occasions
but pretty much all the time.
Man’s belief in reciprocate-favor tendency, following eons of his practicing it, hasdone some queer and bad things in religions. The ritualized murder of the Phoenicians
and the Aztecs, in which they sacrificed human victims to their gods, was a particularly egregious example. And we should not forget that as late as the Punic Wars, thecivilized Romans, out of fear of defeat, returned in a few instances to the practice ofhuman sacrifice. On the other hand, the reciprocity-­based, religion-­boosting idea ofobtaining help from God in reciprocation for good human behavior has probably
been vastly constructive.
Overall, both inside and outside religions, it seems clear to me that reciprocation
tendency’s constructive contributions to man far outweigh its destructive effects. In
cases of psychological tendencies being used to counter or prevent bad results fromone or more other psychological tendencies—for instance, in the case of interventions
to end chemical dependency—you will usually find reciprocation tendency performingstrongly on the constructive side. And the very best part of human life probably lies inrelationships of affection wherein parties are more interested in pleasing than being
pleased—a not-­uncommon outcome in display of reciprocate-favor tendency.
Before we leave reciprocate-favor tendency, the final phenomenon we will consider is widespread human misery from feelings of guilt. To the extent the feeling of
guilt has an evolutionary base, I believe the most plausible cause is the mental conflict
triggered in one direction by reciprocation tendency and in the opposite direction by
reward-­superresponse tendency pushing one to 100 percent of some good thing.
Of course, human culture has often greatly boosted the genetic tendency to suffer from feelings of guilt. Most especially, religious culture has imposed hard-­to-­follow
ethical and devotional demands on people. There is a charming Irish Catholic priest
in my neighborhood who, with rough accuracy, often says, “The old Jews may haveinvented guilt, but we Catholics perfected it.” And if you, like me and this priest,
believe that, 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 youfind feelings of guilt.

23

TEN
Influence-­from-­mere-­association tendency
In the standard conditioned reflexes studied by Skinner and most common in theworld, responsive behavior, creating a new habit, is directly triggered by rewards previously bestowed. For instance, a man buys a can of branded shoe polish, has a goodexperience with it when shining his shoes, and because of this “reward” buys thesame shoe polish when he needs another can.
But there is another type of conditioned reflex wherein mere association triggers
a response. For instance, consider the case of many men who have been trained bytheir previous experience in life to believe that when several similar items are presented for purchase, the one with the highest price will have the highest quality.
Knowing this, some seller of an ordinary industrial product will often change his
product’s trade dress and raise its price significantly, hoping that quality-­seeking buyers will be tricked into becoming purchasers by mere association of his product andits high price.
This industrial practice frequently is effective in driving up sales, and even more
so in driving up profits. For instance, it worked wonderfully with high-­priced power
tools for a long time, and it would work better yet with high-­priced pumps at the bottom of oil wells. With luxury goods, the process works with a special boost because
buyers who pay high prices often gain extra status from thus demonstrating boththeir good taste and their ability to pay.
Even association that appears to be trivial, if carefully planned, can have extreme
and peculiar effects on purchasers of products. The target purchaser of shoe polish
may like pretty girls, so he chooses the polish with the pretty girl on the can or the one
with the pretty girl in the last ad for shoe polish that he saw.
Advertisers know about the power of mere association. You won’t see Cokeadvertised alongside some account of the death of a child. Instead, Coke ads picture
life as happier than reality. Similarly, it is not from mere chance that military bands
play such impressive music. That kind of music, appearing in mere association withmilitary service, helps to attract soldiers and keep them in the army. Most armies havelearned to use mere association in this successful way.
However, the most damaging miscalculations from mere association do not
ordinarily come from advertisers and music providers. Some of the most importantmiscalculations 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.
To avoid being misled by the mere association of some fact with past success, use
this memory clue. Think of Napoleon and Hitler when they invaded Russia after using
their armies with much success elsewhere. And there are plenty of mundane examplesof results like those of Napoleon and Hitler. For instance, a man foolishly gambles in acasino and yet wins. This unlikely correlation causes him to try the casino again, or
again and again, to his horrid detriment. Or a man gets lucky in an odds-­against venture headed by an untalented friend. So influenced, he tries again what worked
before—with terrible results.
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
24

associated with such success that will tend to mislead as one appraises the 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.
The damage to the mind that can come from liking and loving was once demonstrated by obviously false testimony given by an other­wise very admirable woman,
the wife of a party in a jury case. The famous opposing counsel wanted to minimize
his attack on such an admirable woman yet destroy the credibility of her testimony.
And so, in his closing argument, he came to her testimony last. He then shook hishead sadly and said, “What are we to make of such testimony? The answer lies in theold rhyme:‘As the husband is,
So the wife is.
She is married to a clown,
And the grossness of his nature
Drags her down.’ ”
The jury disbelieved the woman’s testimony. They easily recognized the strong
misinfluence of love on her cognition. And 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.
People disagree about how much blindness should accompany the association
called love. In Poor Richard’s Almanack, Franklin counseled, “Keep your eyes wide
open before marriage and half shut thereafter.” Perhaps this eyes-­half-­shut solution isabout right, but I favor a tougher prescription: “See it like it is and love anyway.”
Hating and disliking also cause miscalculation triggered by mere association. In
business, I commonly see people under-­appraise both the competency and morals ofcompetitors they dislike. This is a dangerous practice, usually disguised because it
occurs on a sub­conscious basis.
Another common bad effect from the mere association of a person and a hated
outcome is displayed in Persian messenger syndrome. Ancient Persians actually killedsome messengers whose sole fault was that they brought home truthful bad news, say,of a battle lost. It was actually safer for the messenger to run away and hide instead of
doing his job as a wiser boss would have wanted it done.
Persian messenger syndrome is alive and well in modern life, albeit in less lethal
versions. It is actually dangerous in many careers to be a carrier of unwelcome news.
Union negotiators and employer representatives often know this, and it leads to many
tragedies in labor relations. Sometimes lawyers, knowing their clients will hate them ifthey recommend an unwelcome but wise settlement, will carry on to disaster.
Even in places well known for high cognition, one will sometimes find Persian
messenger syndrome. For instance, years ago, two major oil companies litigated in a
Texas trial court over some ambiguity in an operating agreement covering one of thelargest oil reservoirs in the Western hemisphere. My guess is that the cause of the trial
was some general counsel’s unwillingness to carry bad news to a strong-­minded CEO.
CBS, in its late heyday, was famous for the occurrence of Persian messenger syndrome because 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
25

after another, even exchanging a large share of CBS for a company that had to be liquid­
ated shortly thereafter.
The proper antidote to creating Persian messenger syndrome and its bad effects,
like those at CBS, is to develop, through exercise of will, a habit of welcoming bad news.
At Berkshire, there is a common injunction: “Always tell us the bad news promptly. It isonly the good news that can wait.” It also helps to be so wise and informed that people
fear not telling you bad news because you are so likely to get it elsewhere.
Influence-­from-­mere-­association tendency often has a shocking effect that helps
swamp the normal tendency to return favor for favor. Sometimes, when one receives afavor, his condition is unpleasant, due to poverty, sickness, subjugation, or somethingelse. In addition, the favor may trigger an envy-­driven dislike for the person who was inso favorable a state that he could easily be a favor giver. Under such circumstances, thefavor receiver, prompted partly by mere association of the favor giver with past pain,
will not only dislike the man who helped him but also try to injure him. This accounts
for a famous response, sometimes dubiously attributed to Henry Ford: “Why does thatman hate me so? I never did anything for him.”
I have a friend, whom I will now call Glotz, who had an amusing experience infavor-­giving. Glotz owned an apartment building that he had bought because hewanted, eventually, to use the land in a different development. Pending this outcome,Glotz was very lenient in collecting below-­market rents from tenants. When, at last,
there was a public hearing on Glotz’s proposal to tear down the building, one tenant
who was far behind in his rent payments was particularly angry and hostile. He cameto the public hearing and said, “This proposal is outrageous. Glotz doesn’t need any
more money. I know this because I was supported in college by Glotz fellowships.”
A final serious clump of bad thinking caused by mere association lies in the common use of classification stereotypes. Because Pete knows that Joe is 90 years old andthat most 90-­year-­old persons don’t think very well, Pete appraises old Joe as a thinking klutz even if old Joe still thinks very well. Or, because Jane is a white-­haired woman
and Pete knows no old women good at higher math, Pete appraises Jane as no good at
it even if Jane is a whiz.
This sort of wrong thinking is both natural and common. Pete’s antidote is not tobelieve that, on average, 90-­year-­olds think as well as 40-­year-­olds, or that there are
as many females as males among PhDs in math. Instead, just as he must learn thattrend does not always correctly predict destiny, he must learn that the average dimension in some group will not reliably guide him to the dimension of some specific item.
Otherwise, Pete will make many errors, like that of the fellow who drowned in a riverthat averaged out to only 18 inches deep.

ELEVEN
Simple, pain-­avoiding psychological denial
This phenomenon first hit me hard in World War II when the super-­athlete, super-­student son of a family friend flew off over the Atlantic Ocean and never came back.
His mother, who was a very sane woman, then refused to believe he was dead. That’s
simple, pain-­avoiding psychological denial. The reality is too painful to bear, so one
distorts the facts until they become bearable. We all do that to some extent, often
26

causing terrible problems. The tendency’s most extreme outcomes are usually mixed
up with love, death, and chemical dependency.
Where denial is used to make dying easier, the conduct meets almost no criticism. Who would begrudge a fellow man such help at such a time? But some people
hope to leave life hewing to the iron prescription “It is not necessary to hope in orderto persevere.” And there is something admirable in anyone able to do this.
In chemical dependency, wherein morals usually break down horribly, addictedpersons tend to believe that they remain in respectable condition, with respectableprospects. They thus display an extremely unrealistic denial of reality as they go deeper and deeper into deterioration. In my youth, Freudian remedies failed utterly inreversing chemical dependency, but nowadays Alcoholics Anonymous routinely
achieves a 50 percent cure rate by causing several psychological tendencies to act
together to counter addiction. However, the cure process is typically difficult anddraining, and a 50 percent success rate implies a 50 percent failure rate. One should
stay far away from any conduct at all likely to drift into chemical dependency. Even asmall chance of suffering so great a damage should be avoided.

TWELVE
Excessive self-­regard tendency
We all commonly observe the excessive self-­regard of man. He mostly misappraises
himself on the high side, like the 90 percent of Swedish drivers who judge themselves
to be above average. Such misappraisals also apply to a person’s major “possessions.”
One spouse usually over-­appraises the other spouse. And a man’s children are likewise appraised higher by him than they are likely to be in a more objective view.
Even man’s minor possessions tend to be over-­appraised. Once owned, they suddenly become worth more to him than he would pay if they were offered for sale tohim and he didn’t already own them. There is a name in psychology for this over-­appraise-­your-­own-­possessions phenomenon: the endowment effect. All man’s decisions are suddenly regarded by him as better than would have been the case justbefore he made them.
Man’s excess of self-­regard typically makes him strongly prefer people like himself. Psychology professors have had much fun demonstrating this effect in lost walletexperiments. Their experiments all show that the finder of a lost wallet containing
identity clues will be most likely to return the wallet when the owner most closely
resembles the finder. Given this quality in psychological nature, cliquish groups ofsimilar persons will always be a very influential part of human culture, even after wewisely try to dampen the worst effects.
Some of the worst consequences in modern life come when dysfunctional groupsof cliquish persons, dominated by excessive self-­regard tendency, select as new members of their organizations persons who are very much like themselves. Thus, if the
English department at an elite university 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 be quite resistant to change for the better. So also with apolice department or prison guard unit or political group gone sour, and countlessother places mired in evil and folly, such as the worst of our big-­city teachers’ unions
27

that harm our children by preventing the discharge of ineffective teachers. 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.
Well, naturally, all forms of excess of self-­regard cause much error. How could it
be otherwise?
Let us consider some foolish gambling decisions. In lotteries, the play is much
lower when numbers are distributed randomly than when the player picks his own
number. This is quite irrational. The odds are almost exactly the same and muchagainst the player. Because state lotteries take advantage of man’s irrational love ofself-­picked numbers, modern man buys more lottery tickets than he other­wise would
have, with each purchase foolish.
Intensify man’s love of his own conclusions by adding the possessory wallopfrom the endowment effect and you will find that a man who has already bought a
pork-­belly future on a commodity exchange now foolishly believes even more strongly
than before in the merits of his speculative bet. And foolish sports betting by people
who love sports and think they know a lot about the relative merits of teams is a lot
more addictive than racetrack betting, partly because of man’s automatic over-­appraisal of his own complicated conclusions.
Also extremely counterproductive is man’s tendency to bet, time after time, ingames of skill, like golf or poker, against people who are obviously much better players. Excessive self-­regard tendency diminishes the foolish bettor’s accuracy in appraising his relative degree of talent.
More counterproductive yet are man’s appraisals, typically excessive, of the quality of the future service he is to provide to his business. His over-­appraisal of theseprospective contributions will frequently cause disaster.
Excesses of self-­regard often cause bad hiring decisions because employers
grossly over-­appraise the worth of their own conclusions that rely on impressions in
face-­to-­face contact. The correct antidote to this sort of folly is to underweigh face-­to-­face impressions and overweigh the applicant’s past record.
I once chose exactly this course of action while I served as chairman of an academic search committee. 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. And when it was suggested to me that I wasn’t giving“academic due process,” I replied that I was the one being true to academic values
because I was using academic research showing the poor predictive value of impressions from face-­to-­face interviews.
Because man is likely to be overinfluenced by face-­to-­face impressions that, bydefinition, involve his active participation, a job candidate who is a marvelous presenter often causes great danger under modern executive search practice. In my opinion, Hewlett-­Packard faced just such a danger when it interviewed the articulate,
dynamic Carly Fiorina in its search for a new CEO. I believe that 1) Hewlett-­Packard
made a bad decision when it chose Ms. Fiorina, and 2) this bad decision would nothave been made if Hewlett-­Packard had taken the methodological precautions it would
have taken if it knew more psychology.
There is a famous passage somewhere in Tolstoy that illuminates the power ofexcessive self-­regard tendency. According to Tolstoy, the worst criminals don’t appraisethemselves as all that bad. They come to believe either that 1) they didn’t commit their28

crimes or 2) considering the pressures and disadvantages of their lives, it is understandable and forgivable that they behaved as they did and became what they became.
The second half of the Tolstoy effect, wherein the man makes excuses for his fixable poor performance instead of providing the fix, is enormously important. Becausea majority of mankind will try to get along by making way too many unreasonableexcuses for fixable poor performance, it is very important to have personal and institutional antidotes limiting the ravages of such folly.
On the personal level, a man should try to face the two simple facts: 1) Fixable
but unfixed bad performance 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 bediscarded in due course if you keep giving excuses instead of behaving as you should.
The main institutional antidotes to this part of the Tolstoy effect are 1) a fair,
meritocratic, demanding culture, plus personnel handling methods that build up
morale; and 2) severance of the worst offenders.
Of course, when you can’t sever, as in the case of your own child, you must try to
fix the child as best you can. I once heard of a child teaching method so effective thatthe child remembered the learning experience over 50 years later. The child later
became dean of the USC School of Music, and then related to me what 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 tosimply take all you want and call yourself a thief every time you do it.”
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, yourproperty, and the value of your past and future activity. This isn’t easy to do well andwon’t work perfectly, but it will work much better than simply letting psychologicalnature take its normal course.
While an excess of self-­regard is often counterproductive in its effects on cognition, it 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.”
Of course, some high self-­appraisals are correct and serve better than false modesty. Moreover, self-­regard in the form of a justified pride in a job well done, or a life
well lived, is a large constructive force. Without such justified pride, many more airplanes would crash. “Pride” is another word generally left out of psychology textbooks, and this omission is not a good idea. It is also not a good idea to construe theBible’s parable about the Pharisee and the publican as condemning all pride.
Of all forms of useful pride, perhaps the most desirable is a justified pride inbeing trustworthy. Moreover, the trustworthy man, even after allowing for the inconveniences of his chosen course, ordinarily has a life that averages out better than hewould have if he provided less reliability.

29

THIRTEEN
Overoptimism tendency
About three centuries before the birth of Christ, Demosthenes, the most famous
Greek orator, said, “What a man wishes, that also will he believe.”
Demosthenes, parsed out, was thus saying that man displays not only simple,
pain-­avoiding psychological denial but also an excess of optimism, even when he isalready doing well.
The Greek orator was clearly right about an excess of optimism being the normal human condition, even when pain or the threat of pain is absent. Witness happy
people buying lottery tickets or believing that credit-­furnishing, delivery-­makinggrocery stores were going to displace a great many superefficient cash-­and-­carrysupermarkets.
One standard antidote to foolish optimism is trained, habitual use of the simple
probability math of Fermat and Pascal, taught in my youth to high school sophomores. The mental rules of thumb that evolution gives you to deal with risk are notadequate. They resemble the dysfunctional golf grip you would have if you relied on a
grip driven by evolution instead of golf lessons.

FOURTEEN
Deprival-­superreaction tendency
The quantity of man’s pleasure from a $10 gain does not exactly match the quantity ofhis displeasure from a $10 loss. That is, the loss seems to hurt much more than thegain seems to help. Moreover, 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. I include the natural human reactions to both kindsof loss experience—the loss of the possessed reward and the loss of the almost-­
possessed reward—under one description, deprival-­superreaction tendency.
In displaying deprival-­superreaction tendency, man frequently incurs disadvantage by misframing his problems. He will often compare what is near instead of whatreally matters. For instance, a man with $10 million in his brokerage account will often
be extremely irritated by the accidental loss of $100 out of the $300 in his wallet.
The Mungers once owned a tame and good-­natured dog that displayed thecanine version of deprival-­superreaction tendency. There was only one way to get bitten by this dog, and that was to try and take some food away from him after healready had it in his mouth. If you did that, this friendly dog would automatically bite.
He couldn’t help it. Nothing could be more stupid than for the dog to bite his master.
But the dog couldn’t help being foolish. He had an automatic deprival-­superreaction
tendency in his nature.
Humans are much the same as this Munger dog. A man ordinarily reacts withirrational intensity to even a small loss, or threatened loss, of property, love, friendship, dominated territory, opportunity, status, or any other valued thing. As a natural
result, bureaucratic infighting over the threatened loss of dominated territory oftencauses immense damage to an institution as a whole. This factor, among others,
accounts for much of the wisdom of Jack Welch’s long fight against bureaucratic ills at
30

General Electric. Few business leaders have ever conducted wiser campaigns.
Deprival-­superreaction tendency often protects ideological or religious views bytriggering dislike and hatred directed toward vocal nonbelievers. This happens in part
because the ideas of the non­believers, if they spread, will diminish the influence ofviews that are now supported by a comfortable environment, including a strong belief-­
maintenance system. University liberal arts departments, law schools, and businessorganizations all display plenty of such ideology-­based groupthink that rejects almost
all conflicting inputs. When the vocal critic is a former believer, hostility is often
boosted both by 1) a concept of betrayal 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.
The foregoing considerations help account for the old idea of heresy, which for
centuries justified much killing of heretics, frequently after torture and frequently
accomplished by burning the victim alive. It is almost everywhere the case that
extremes of ideology are maintained with great intensity and with great antipathy tononbelievers, causing extremes of cognitive dysfunction. This happens, I believe,
because two psychological tendencies are usually acting concurrently toward thissame sad result: 1) inconsistency-­avoidance tendency, plus 2) deprival-­superreaction
tendency.
One antidote to intense, deliberate maintenance of groupthink is an extreme culture of courtesy, kept in place despite ideological differences, like the behavior of thejustices now serving on the US Supreme Court. Another antidote is to deliberately
bring in able and articulate disbelievers of incumbent groupthink. Successful corrective measures to evil examples of groupthink maintenance have included actions likethat of Derek Bok when, as president of Harvard, he started disapproving tenureappointments proposed by ideologues at Harvard Law School.
Even a 1-­degree loss from a 180-­degree view will sometimes create enoughdeprival-­superreaction tendency to turn a neighbor into an enemy, as I once observed
when I bought a house from one of two neighbors locked into hatred by a tiny tree
newly installed by one of them. As the case of these two neighbors illustrated, theclamor of almost any group of neighbors displaying irrational, extreme deprival-­
superreaction over some trifle in a zoning hearing is not a pretty thing to watch. Suchbad behavior drives some people from the zoning field. I once bought some golf clubs
from an artisan who was formerly a lawyer. When I asked him what kind of law hehad practiced, I expected to hear him say divorce law. But his answer was zoning law.
Deprival-­superreaction tendency has ghastly effects in labor relations. Most of
the deaths in the labor strife that occurred before World War I came when employers
tried to reduce wages. Nowadays we see fewer deaths and more occasions when whole
companies disappear, as competition requires either takeaways from labor—which it
will not consent to—or the death of the business. Deprival-­superreaction tendency
causes much of this labor resistance, often in cases where it would be in labor’s interest to make a different decision.
In contexts other than labor relations, takeaways are also difficult to get. Many
tragedies therefore occur that would have been avoided had there been more rationality and less subconscious heed of the imperative from deprival-­
superreaction
tendency.
Deprival-­
superreaction tendency is also a huge contributor to ruin from the31compulsion to gamble. First, it causes the gambler to have a passion to get even once
he has suffered a loss, and the passion grows with the loss. Second, the most addictive
forms of gambling provide a lot of near misses, and each one triggers deprival-­
superreaction tendency. Some slot machine creators are vicious in exploiting thisweakness of man. Electronic machines enable these creators to produce a lot of meaningless bar-­bar-­lemon results that greatly increase play by fools who think they havevery nearly won large rewards.
Deprival-­superreaction tendency often does much damage to man in open-­outcry
auctions. The social proof that we will next consider tends to convince man that thelast price from another bidder was reasonable, and then deprival-­superreaction tendency prompts him strongly to top the last bid. 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.
Deprival-­
superreaction tendency and inconsistency-­
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. One of thebest antidotes to this folly is good poker skill learned young. The teaching value of
poker demonstrates that not all effective teaching occurs on a standard academic path.
I, myself, the would-­be instructor here, many decades ago made a big mistakecaused in part by the subconscious operation of my deprival-­superreaction tendency.
A friendly broker called and offered me 300 shares of ridiculously underpriced, very
thinly traded Belridge Oil at $115 per share, which I purchased using cash I had on
hand. The next day, he offered me 1,500 more shares at the same price, which I
declined to buy, partly because I could only have made the purchase had I sold something or borrowed the required $173,000.
This was a very irrational decision. I was a well-­to-­do man with no debt; there
was no risk of loss, and similar no-­risk opportunities were not likely to come along.
Within two years, Belridge Oil sold out to Shell at a price of about $3,700 per share,
which made me about $5.4 million poorer than I would have been had I then been
psychologically acute. As this tale demonstrates, psychological ignorance can be very
expensive.
Some people may question my defining deprival-­
superreaction tendency toinclude reaction to profit barely missed, as in the well-­documented responses of slot
machine players. However, I believe that I haven’t defined the tendency as broadly as
I should.
My reason for suggesting an even broader definition is that many 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 super­
response, 2) status quo bias from inconsistency-­
avoidance tendency, and 3) the
endowment effect from excessive self-­regard tendency. But I believe the single strongest irrational explanation is a form of deprival-­superreaction tendency. Many ofthese shareholders simply can’t stand the idea of having their Berkshire Hathaway
holdings smaller. 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.

32

FIFTEEN
Social-­proof tendency
The otherwise complex behavior of man is much simplified when he automaticallythinks and does what he observes to be thought and done around him. Such followership often works fine. For instance, what simpler way could there be to find out how towalk to a big football game in a strange city than by following the flow of the crowd?
For some such reason, man’s evolution left him with social-­proof tendency, an automatic tendency to think and act as he sees others around him thinking and acting.
Psychology professors love social-­proof tendency because in their experiments it
causes ridiculous results. For instance, if a professor arranges for some stranger toenter an elevator wherein 10 compliance practitioners are all silently standing so thatthey face the rear of the elevator, the stranger will often turn around and do the same.
The psychology professors can also use social-­proof tendency to cause people to makelarge and ridiculous measurement errors.
And, of course, teenagers’ parents usually learn more than they would like about
teenagers’ cognitive errors from social-­proof tendency. This phenomenon was recently involved in a breakthrough by Judith Rich Harris, who demonstrated that super-­respect by young people for their peers, rather than for parents or other adults, isordained to some considerable extent by the genes of the young people. This makes it
wise for parents to rely more on manipulating the quality of the peers than on exhortations to their own offspring. A person like Ms. Harris who can provide an insight ofthis quality and utility backed by new reasons has not lived in vain.
In the highest reaches of business, it is not uncommon to find leaders who display followership akin to that of teenagers. If one oil company foolishly buys a mine,other oil companies often quickly join in buying mines. So too if the purchased company makes fertilizer. Both of these oil-­company buying fads actually bloomed, withbad results.
Of course, it is difficult to identify and correctly weigh all the possible ways todeploy the cash flow of an oil company. So oil company executives, like everyone else,
have made many bad decisions that were quickly triggered by discomfort from doubt.
Going along with social proof provided by the action of other oil companies ends this
discomfort in a natural way.
When will social-­proof tendency be most easily triggered? Here, the answer isclear from many experiments: Triggering most readily occurs in the presence of puzzlement or stress, and particularly when both exist.
Because stress intensifies social-­proof tendency, disreputable sales organizations—engaged, for instance, in such action as selling swampland to schoolteachers—
manipulate targets into situations combining isolation and stress. The isolation
strengthens the social proof provided by both the knaves and the people who buy
first, and the stress, often increased by fatigue, augments the targets’ susceptibility to
the social proof. And, of course, the techniques of our worst “religious” cults imitate
those of the knavish salesmen. One cult even used rattlesnakes to heighten the stressfelt by conversion targets.
Because both bad and good behavior are made contagious by social-­proof tendency, it is highly important that human societies 1) stop any bad behavior before it
spreads and 2) foster and display all good behavior.
33

My father once told me that just after commencing law practice in Omaha, hewent with a large group from Nebraska to South Dakota to hunt pheasants. A South
Dakota hunting license was, say, $2 for South Dakota residents and $5 for nonresidents. All the Nebraska residents, one by one, signed up for South Dakota licenses withphony South Dakota addresses until it was my father’s turn. Then, according to him,
he barely prevented himself from doing what the others were doing, which was some
sort of criminal offense.
Not everyone so resists the social contagion of bad behavior. And therefore we
often get Serpico syndrome, named to commemorate the state of a near-­totally corrupt New York police division joined by Frank Serpico. He was then nearly murderedby gunfire because of his resistance to going along with the corruption in the division.
Such corruption was being driven by social proof plus incentives, the combinationthat creates Serpico syndrome. The Serpico story should be taught more than it isbecause the didactic power of its horror is aimed at a very important evil, driven substantially by a very important force: social proof.
In social proof, it is not only action by others that misleads but also their inaction.
In the presence of doubt, inaction by others becomes social proof that inaction is theright course. Thus, the inaction of a great many bystanders led to the death of Kitty
Genovese in a famous incident much discussed in introductory psychology courses.
In the ambit of social proof, the outside directors on a corporate board usuallydisplay the near ultimate form of inaction. They fail to object to anything much shortof an axe murder until some public embarrassment of the board finally causes theirintervention. A typical board of directors culture was once well described by my friend
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.”In advertising and sales promotion, social-­proof tendency is about as strong afactor as one could imagine. “Monkey see, monkey do” is the old phrase that reminds
one of how strongly John will often wish to do something or have something justbecause Joe does or has it. One interesting consequence is that an advertiser will pay
a lot to have its soup can instead of someone else’s in a movie scene involving soup
consumption only in a peripheral way.
Social-­proof tendency often interacts in a perverse way with envy/jealousy anddeprival-­superreaction tendency. One such interaction amused my family for years as
people recalled the time when my cousin Russ and I, at ages 3 and 4, fought and howled
over a single surplus shingle while surrounded by a virtual sea of surplus shingles.
But the adult versions of this occasion, boosted by psychological tendencies preserving ideologies, are not funny and can bring down whole civilizations. The Middle
East now presents just such a threat. By now the resources spent by Jews, Arabs, andall others over a small amount of disputed land, if divided arbitrarily among landclaimants, would have made every one better off, even before taking into account any
benefit from reduced threat of war, possibly nuclear.
Outside domestic relations, it is rare now to try to resolve disputes by techniques
including the discussion of impacts from psychological tendencies. Considering theimplications of childishness that would be raised by such inclusion, and the defects ofpsychology as now taught, this result may be sound. But given the nuclear stakes now
involved and the many failures in important negotiations lasting decades, I often wonder if some day, in some way, more use of psychological insight will eventually improve34

outcomes. If so, correct teaching of psychology matters a lot. And, if old psychology
professors are even less likely than old physics professors to learn new ways, which
seems nearly certain, then we may, as Max Planck predicted, need a new generation of
psychology professors who have grown up to think in a different way.
If only one lesson is to be chosen from a package of lessons involving social-­
proof tendency and used in self-­improvement, my favorite would be: Learn how toignore the examples from others when they are wrong, because few skills are more
worth having.

SIXTEEN
Contrast-­misreaction tendency
Because the nervous system of man does not naturally measure in absolute scientificunits, it must instead rely on something simpler. The eyes have a solution that limits
their programming needs: The contrast in what is seen is registered. And, as in sight,
so does it go, largely, in the other senses. Moreover, as perception goes, so goes cognition. The result is man’s contrast-­misreaction tendency.
Few psychological tendencies do more damage to correct thinking. Small-­scale
damages involve instances such as man’s buying an overpriced $1,000 leather dashboard merely because the price is so low compared to his concurrent purchase of a$65,000 car. Large-­scale damages often ruin lives, as when a wonderful woman withterrible parents marries a man who would be judged satisfactory 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.
A particularly reprehensible form of sales practice occurs in the offices of somereal estate brokers. A buyer from out of the city, perhaps needing to shift his family
there, visits the office with little time available. The salesman deliberately shows thecustomer three awful houses at ridiculously high prices. Then he shows him a merely
bad house at a price only moderately too high. And boom, the broker often makes aneasy sale.
Contrast-­misreaction tendency is routinely used to cause disadvantage for customers buying merchandise and services. To make an ordinary price seem low, thevendor will very frequently create a highly artificial price that is much higher than theprice always sought, then advertise his standard price as a big reduction from hisphony price. Even when people know that this sort of customer manipulation is being
attempted, it will often work to trigger buying. This phenomenon accounts in part formuch advertising in newspapers. It also demonstrates that being aware of psychological ploys is not a perfect defense.
When a man’s steps are consecutively taken toward disaster, with each step
being very small, the brain’s contrast-­misreaction tendency will often let the man go
too far toward disaster to be able to avoid it. This happens because each step presents
so small a contrast from his present position.
A bridge-­playing pal of mine once told me that a frog tossed into very hot water
would jump out, but the same frog would end up dying if placed in room-­temperaturewater that was later heated at a very slow rate. My few shreds of physiological knowledge make me doubt this account. But no matter, because many businesses die in just35the manner claimed by my friend for the frog. Cognition, misled by tiny changes
involving low contrast, will often miss a trend that is destiny.
One of Ben Franklin’s best-­remembered and most useful aphorisms is “A small
leak will sink a great ship.” The utility of the aphorism is large precisely because thebrain so often misses the functional equivalent of a small leak in a great ship.

SEVENTEEN
Stress-­influence tendency
Everyone recognizes that sudden stress, for instance from a threat, will cause a rushof adrenaline in the human body, prompting a faster and more extreme reaction. And
everyone who has taken Psych 101 knows that stress makes social-­proof tendency
more powerful. In a phenomenon less well recognized but still widely known, lightstress can slightly improve performance—say, in examinations—whereas heavy stresscauses dysfunction.
But few people know more about really heavy stress than that it can cause
depression. For instance, most people know that an “acute stress depression” makes
thinking dysfunctional because it causes an extreme of pessimism, often extended inlength and usually accompanied by activity-­stopping fatigue. Fortunately, as mostpeople also know, such a depression is one of mankind’s more reversible ailments.
Even before modern drugs were available, many people afflicted by depression, such as
Winston Churchill and Samuel Johnson, gained great achievement in life.
Most people know very little about non-­depressive mental breakdowns influenced by heavy stress. But there is at least one exception, involving the work of Pavlov
when he was in his 70s and 80s. Pavlov had won a Nobel Prize early in life by usingdogs to work out the physiology of digestion. Then he became world-­famous by working out mere-­association responses in dogs, initially salivating dogs—so much so thatchanges in behavior triggered by mere association, like those caused by much modern
advertisement, are today often said to come from “Pavlovian” conditioning.
What happened to cause Pavlov’s last work was especially interesting. During thegreat Leningrad flood of the 1920s, Pavlov had many dogs in cages. Their habits had
been transformed, by a combination of his Pavlovian conditioning plus standard
reward responses, into distinct and different patterns. As the waters of the flood cameup and receded, many dogs reached a point where they had almost no airspace between
their noses and the tops of their cages. This subjected them to maximum stress. Immediately thereafter, Pavlov noticed that many of the dogs were no longer behaving as
they had. The dog that formerly had liked his trainer now disliked him, for example.
This result reminds one of modern cognition reversals in which a person’s loveof his parents suddenly becomes hate, as new love has been shifted suddenly to a cult.
The unanticipated, extreme changes in Pavlov’s dogs would have driven any goodexperimental scientist into a near-­frenzy of curiosity. That was indeed Pavlov’s reaction. But not many scientists would have done what Pavlov next did—which was tospend the rest of his long life giving stress-­induced nervous breakdowns to dogs, after
which he would try to reverse the breakdowns, all the while keeping careful experimental records.
He found that 1) he could classify dogs so as to predict how easily a particular36

dog would break down, 2) the dogs hardest to break down were also the hardest to
return to their pre-­breakdown state, 3) any dog could be broken down, and 4) hecouldn’t reverse a breakdown except by reimposing stress.
Now, practically everyone is revolted by such experimental treatment of man’sfriend, the dog. Moreover, Pavlov was Russian and did his last work under the Communists. Maybe those facts account for the present extreme widespread ignorance of
Pavlov’s last work. The two Freudian psychiatrists with whom I tried many years ago
to discuss this work had never heard of it. And the dean of a major medical school
actually asked me, several years ago, if any of Pavlov’s experiments were “repeatable”
in the experiments of other researchers. Obviously, Pavlov is now a sort of forgotten
hero in medical science.
I first found a description of Pavlov’s last work in a popular paperback, written bysome Rockefeller-­financed psychiatrist, when I was trying to figure out 1) how cults
worked their horrible mischief and 2) what the law should say about what parents
could do to “deprogram” children who had become brainwashed zombies. Naturally,mainstream law objected to the zombies being physically captured by their parents andnext subjected to stress that would help to deprogram the effects of the stress they had
endured in cult conversions.
I never wanted to get into the legal controversy that existed about this subject.
But I did conclude that the controversy couldn’t be handled with maximized rationality without considering whether, as Pavlov’s last work suggests, the heavy-­handed
imposition of stress might be the only reversal method that would work to remedy
one of the worst evils imaginable: a stolen mind. I have included this discussion of
Pavlov 1) partly out of general antagonism toward taboos, 2) partly to make my talkreasonably complete as it considers stress, and 3) partly because I hope some listener
may continue my inquiry with more success.

EIGHTEEN
Availability-­misweighing tendency
This mental tendency echoes the words of the song “When I’m not near the girl I love,
I love the girl I’m near.” Man’s imperfect, limited-­capacity brain easily drifts into
working with what’s easily available to it. And the brain can’t use what it can’t remember or what it is blocked from recognizing because it is heavily influenced by one ormore psychological tendencies bearing strongly on it, as the fellow is influenced by
the nearby girl in the song. So the mind overweighs what is easily available and thus
displays availability-­misweighing tendency.
The main antidote to miscues from availability-­
misweighing tendency often
involve procedures, including the use of checklists, which are almost always helpful.
Another antidote is to behave somewhat like Darwin did when he emphasized disconfirming evidence: What should be done is to especially emphasize factors that don’t
produce reams of easily available numbers instead of drifting mostly or entirely into
considering factors that do produce such numbers. Still another antidote is to findand hire some skeptical, articulate people with far-­reaching minds to act as advocatesfor notions that are opposite to the incumbent notions.
One consequence of this tendency is that extra-­vivid evidence, being so
37

memorable and thus more available in cognition, should often consciously be underweighed, while less vivid evidence should be overweighed. Still, the special strength of
extra-­vivid images in influencing the mind can be constructively used 1) in persuading
someone else to reach a correct conclusion or 2) as a device for improving one’s own
memory by attaching vivid images, one after the other, to many items one doesn’t want
to forget. Indeed, such use of vivid images as memory boosters is what enabled thegreat orators of classical Greece and Rome to give such long, organized speeches without using notes.
The great algorithm to remember in dealing with this tendency is simple: An idea
or a fact is not worth more merely because it is easily available to you.

NINETEEN
Use-­it-­or-­lose-­it tendency
All skills attenuate with disuse. I was a whiz at calculus until age 20, after which theskill was soon obliterated by total nonuse. The right antidote to such a loss is to makeuse of the functional equivalent of the aircraft simulator employed in pilot training.
This allows a pilot to continuously practice all of the rarely used skills that he can’t
afford to lose.
Throughout his life, a wise man engages in practice of all his useful, rarely usedskills, many of them outside his discipline, as a sort of duty to his better self. If he
reduces the number of skills he practices, and therefore the number of skills heretains, he will naturally drift into error from man-­with-­a-­hammer tendency. Hislearning capacity will also shrink as he creates gaps in the latticework of theory heneeds as a framework for understanding new experience. It is also essential for athinking man to assemble his skills into a checklist that he routinely uses. Any othermode of operation will cause him to miss much that is important.
Skills of a very high order can be maintained only with daily practice. The pianist[Ignacy Jan] Paderewski once said that if he failed to practice for a single day, he could
notice his performance deterioration, and that after a week’s gap in practice, the audience could notice it as well.
The hard rule of use-­it-­or-­lose-­it tendency tempers its harshness for the diligent.
If a skill is raised to fluency, instead of merely being crammed 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. 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.

TWENTY
Drug-­misinfluence tendency
This tendency’s destructive power is so widely known to be intense, with frequent
tragic consequences for cognition and the outcome of life, that it needs no discussion here to supplement that previously given under “Simple, pain-­avoiding psychological denial.”

38

TWENTY-­ONE
Senescence-­misinfluence tendency
With advanced age there comes a natural cognitive decay, differing among individuals
in the earliness of its arrival and the speed of its progression. Practically no one isgood at learning complex new skills when very old. But some people remain pretty
good at maintaining intensely practiced old skills until late in life, as one can notice inmany a bridge tournament.
Old people like me get pretty skilled, without working at it, at disguising age-­
related deterioration because social convention, like clothing, hides much decline.
Continuous thinking and learning, done with joy, can somewhat help delay what isinevitable.

TWENTY-­T WO
Authority-­misinfluence tendency
Living in dominance hierarchies as he does, like all his ancestors before him, man wasborn mostly to follow leaders, with only a few people doing the leading. And so,human society is formally organized into dominance hierarchies, with their culture
augmenting the natural follow-­the-­leader tendency of man.
But automatic as most human reactions are, with the tendency to follow leaders
being no exception, man is often destined to suffer greatly when the leader is wrong
or when his leader’s ideas don’t get through properly in the bustle of life and are misunderstood. And so we find much miscognition from man’s authority-­misinfluencetendency.
Some of the misinfluences are amusing, as in a case described by Cialdini. A physician left a written order for a nurse treating an earache, as follows: “Two drops,
twice a day, r. ear.” The nurse then directed the patient to turn over and put the eardrops in his anus.
Other versions of confused instructions from authority figures are tragic. In
World War II, a new pilot for a general who sat beside him in the copilot’s seat was so
anxious to please his boss that he misinterpreted some minor shift in the general’s
position as a direction to do some foolish thing. The pilot crashed the plane andbecame a paraplegic. Well, naturally, cases like this one get the attention of careful
thinkers like Boss Buffett, who always acts like an over-­quiet mouse around his pilots.
Such cases are also given attention in the simulator training of copilots who haveto learn to ignore certain really foolish orders from boss pilots, because boss pilots
will sometimes err disastrously. Even after going through such a training regime, however, copilots in simulator exercises will too often allow the simulated plane to crashbecause of some extreme and perfectly obvious simulated error of the chief pilot.
After Corporal Hitler had risen to dominate Germany, leading a bunch of believing Lutherans and Catholics into orgies of genocide and other mass destruction, one
clever psychology professor, Stanley Milgram, decided to do an experiment to determine exactly how far authority figures could lead ordinary people into gross misbehavior. In this experiment, a man posing as an authority figure, namely a professor
governing a respectable experiment, was able to trick a great many ordinary people
39into giving what they had every reason to believe were massive electric shocks that
inflicted heavy torture on innocent fellow citizens. This experiment did demonstrate aterrible result contributed to by authority-­misinfluence tendency, but it also demonstrated extreme ignorance in the psychology professoriate right after World War II.
Almost any intelligent person with my checklist of psychological tendencies in
his hand would, by simply going down the checklist, have seen that Milgram’s experiment involved about six powerful psychological tendencies acting in confluence tobring about his extreme experimental result. For instance, the person pushing Milgram’s shock lever was given much social proof from the presence of inactive bystanders, whose silence communicated that his behavior was okay. Yet it took over a
thousand psychological papers, published before I got to Milgram, for the professoriate to get his experiment only about 90 percent as well understood as it would have
immediately been by any intelligent person who used 1) any sensible organization of
psychology along the lines of this talk, plus 2) a checklist procedure. This outcome
displaying the dysfunctional thinking of long-­dead professors deserves a better explanation. I will later deal with the subject in a very hesitant fashion.
We can be pleased that the psychology professoriate of a former era wasn’t quite
as dysfunctional as the angler in my next-­to-­last illustration of authority-­misinfluencetendency. When I once fished in the Rio Colorado in Costa Rica, my guide, in a state ofshock, told me a story about an angler who’d earlier come to the river without everhaving fished for tarpon. A fishing guide like the one I had runs the boat and gives fishing advice, establishing himself in this context as the ultimate authority figure. In thecase of this guide, his native language was Spanish, while the angler’s native language
was English. The angler got a big tarpon on and began submitting to many directions
from this authority figure called a guide: tip up, tip down, reel in, etc. Finally, when it
was necessary to put more pressure on the fish by causing more bending of theangler’s rod, the guide said in English, “Give him the rod, give him the rod.” Well, theangler threw his expensive rod at the fish, and when last seen, it was going down the
Rio Colorado toward the ocean. This example shows how powerful is the tendency to
go along with an authority figure and how it can turn one’s brain into mush.
My final example comes from business. A psychology PhD once became a CEOof a major company and went wild, creating an expensive new headquarters, with agreat wine cellar, at an isolated site. At some point, his underlings remonstrated thatmoney was running short. “Take the money out of the depreciation reserves,” said theCEO. Not too easy, because a depreciation reserve is a liability account. So strong isundue respect for authority that this CEO, and many even worse examples, have actually been allowed to remain in control of important business institutions for long periods after it was clear they should be removed.
The obvious implication: 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.

40

TWENTY-­THREE
Twaddle tendency
Man, as a social animal who has the gift of language, is born to prattle and pour out
twaddle that does much damage when serious work is being attempted. Some people
produce copious amounts of twaddle, and others very little.
Trouble from the honeybee version of twaddle was once demonstrated in aninteresting experiment. A honeybee normally goes out and finds nectar and thencomes back and does a dance that communicates to the other bees where the nectar
is. The other bees then go out and get it. Well, some scientist—clever, like B. F. Skinner—decided to see how well a honeybee would do with a handicap. He put the nectar
straight up. Way up. Well, in a natural setting, there is no nectar a long way straight up,
and the poor honeybee doesn’t have a genetic program that is adequate to handle
what she now has to communicate. You might guess that this honeybee would comeback to the hive and slink into a corner, but she doesn’t. She comes into the hive anddoes an incoherent dance.
Well, all my life I’ve been dealing with the human equivalent of that honeybee.
It’s a very important part of wise administration to keep prattling people pouring out
twaddle far away from the serious work.
A rightly famous Caltech engineering professor, exhibiting more insight thantact, once expressed his version of this idea as follows: “The principal job of an academic administration is to keep the people who don’t matter from interfering with thework of the people who do.”I include this quotation partly because I long suffered from backlash caused by
my version of this professor’s conversational manner. After much effort, I was able toimprove only slightly, so one of my reasons for supplying the quotation is my hopethat, at least in comparison, I will appear tactful.

TWENTY-­FOUR
Reason-­respecting tendency
There is in man, particularly one in an advanced culture, a natural love of accurate
cognition and a joy in its exercise. This accounts for the widespread popularity ofcrossword puzzles, other puzzles, and bridge and chess columns, as well as all games
requiring mental skill.
This tendency has an obvious implication. It makes man especially prone to learn
well when a would-­be teacher gives correct reasons for what is taught instead of simply laying out the desired belief ex cathedra with no reasons given. Few practices,
therefore, are wiser than not only thinking through reasons before giving orders but
also communicating these reasons to the recipient of the order.
No one knew this better than Carl Braun, who designed oil refineries with spectacular skill and integrity. He had a very simple rule, one of many in his large, Teutonic
company: You had to tell who was to do what, where, when, and why. And if you wrote a
communication leaving out your explanation of why the addressee was to do what
was ordered, Braun was likely to fire you, because Braun well knew that ideas got
through best when the reasons for the ideas were meticulously laid out.
41

In general, learning is most easily assimilated and used when, lifelong, people
consistently hang their experience, actual and vicarious, on a latticework of theory
answering the question “Why?” Indeed, the question “Why?” is a sort of Rosettastone opening up the major potentiality of mental life.
Unfortunately, reason-­respecting tendency is so strong that even a person’s giving of meaningless or incorrect reasons will increase compliance with his orders andrequests. This has been demonstrated in psychology experiments wherein compliance practitioners successfully jump to the head of the lines in front of copying
machines by explaining their reason: “I have to make some copies.”
This sort of unfortunate byproduct of reason-­respecting tendency is a conditioned reflex based on a widespread appreciation of the importance of reasons. Naturally, the practice of laying out various claptrap reasons is much used by commercial
and cult compliance practitioners to help them get what they don’t deserve.

TWENTY-­FIVE
Lollapalooza tendency—the tendency to get extreme consequences fromconfluences of psychological tendencies acting in favor of a particular outcome
This tendency was not in any of the psychology texts I once examined, at least in any
coherent fashion, yet it dominates life. It accounts for the extreme result in the Milgram experiment and the extreme success of some cults that have stumbled throughpractice evolution into bringing pressure from many psychological tendencies to bearat the same time on conversion targets. The targets vary in susceptibility, like the dogs
Pavlov worked with in his old age, but some of the minds that are targeted simply
snap into zombiedom under cult pressure. Indeed, that is one cult’s name for the conversion phenomenon: snapping.
What are we to make of the extreme ignorance of the psychology textbook writers of yesteryear? How could anyone who had taken a freshman course in physics or
chemistry not be driven to consider, above all, how psychological tendencies combine
and with what effects? Why would anyone think his study of psychology was adequate without his having endured the complexity involved in dealing with intertwined
psychological tendencies? What could be more ironic than professors using oversimplified notions while studying bad cognitive effects grounded in the mind’s tendency
to use oversimplified algorithms?
I will make a few tentative suggestions. Maybe many of the long-­dead professors
wanted to create a whole science from one narrow type of repeatable psychology
experiment that was conductible in a university setting and that aimed at one psychological tendency at a time. If so, these early psychology professors made a massive error in so restricting their approach to their subject. It would be like physics
ignoring 1) astrophysics, because it couldn’t happen in a physics lab, plus 2) all compound effects.
What psychological tendencies could account for early psychology professors
adopting an over-­restricted approach to their own subject matter? One candidate
would be availability-­misweighing tendency grounded in a preference for easy-­to-­control data. And then the restrictions would eventually create an extreme case ofman-­with-­a-­hammer tendency. Another candidate might be envy/jealousy tendency,
42

through which early psychology professors displayed some weird form of envy of aphysics that was misunderstood. This possibility tends to demonstrate that leaving
envy/jealousy out of academic psychology was never a good idea.
I now quitclaim all these historical mysteries to my betters.
Well, that ends my brief description of psychological tendencies.

43

QUESTIONS AND ANSWERS

Now, as promised, I will ask and answer a few general questions.
My first is a compound question: Isn’t this list of psychological tendencies tautological to some extent compared to the system of Euclid? That is, aren’t there overlaps
in the tendencies? And couldn’t the system be laid out just as plausibly in a somewhat
different way? The answers are yes, yes, and yes, but this matters only moderately.
Further refinement of these tendencies, while desirable, has a limited practical potential because a significant amount of messiness is unfixable in a soft science like
psychology.
My second question is: Can you supply a real-­world model, instead of a Milgram-­type controlled psychology experiment, that uses your system to illustrate multiple
psychological tendencies interacting in a plausibly diagnosable way? The answer isyes. One of my favorite cases involves the McDonnell Douglas airliner evacuation test.
Before a new airliner can be sold, the government requires that it pass an evacuation test, during which a full load of passengers must get out in some short period oftime. The government directs that the test be realistic, so you can’t pass by evacuating
only 20-­year-­old athletes. So McDonnell Douglas scheduled such a test in a darkened
hangar using a lot of old people as evacuees. The passenger cabin was, say, 20 feetabove the concrete floor of the hangar and was to be evacuated through moderately
flimsy rubber chutes. The first test was made in the morning. There were about 20
very serious injuries, and the evacuation took so long it flunked the time test. So what
did McDonnell Douglas next do? It repeated the test in the afternoon, and this time
there was another failure, with about 20 more serious injuries, including one case ofpermanent paralysis.
What psychological tendencies contributed to this terrible result? Well, using mytendency list as a checklist, I come up with the following explanation:
Reward-­superresponse tendency drove McDonnell Douglas to act fast. It
couldn’t sell its airliner until it passed the test. Also pushing the company was doubt-­
avoidance tendency, with its natural drive to arrive at a decision and run with it. Thenthe government’s direction that the test be realistic drove authority-­misinfluence tendency into the mischief of causing McDonnell Douglas to overreact by using what was
obviously too dangerous a test method. By now the course of action had been decided,
so inconsistency-­avoidance tendency helped preserve the near-­idiotic plan. When all
the old people got to the dark hangar, with its high airline cabin and concrete floor, thesituation must have made McDonnell Douglas employees very queasy, but they saw
other employees and supervisors not objecting. Social-­
proof tendency, therefore,swamped the queasiness. This allowed continued action as planned, a continuationthat was aided by more authority-­misinfluence tendency.
Then came the disaster of the morning test with its failure, plus serious injuries.
McDonnell Douglas ignored the strong disconfirming evidence from the failure of thefirst test because confirmation bias, aided by the triggering of a strong deprival-­
superreaction tendency, favored maintaining the original plan. McDonnell Douglas’s
deprival-­suppereaction tendency was now like that which causes a gambler, bent ongetting even after a huge loss, to make his final big bet. After all, McDonnell Douglas
was going to lose a lot if it didn’t pass its test as scheduled.
44

More psychology-­based explanation can probably be made, but the foregoing
discussion is complete enough to demonstrate the utility of my system when used in achecklist mode.
My third question is also compound: In the practical world, what good is thethought system laid out in this list of tendencies? Isn’t practical benefit prevented
because these psychological tendencies are so thoroughly programmed into thehuman mind by broad evolution—the combination of genetic and cultural evolution—that we can’t get rid of them?
Well, the answer is that the tendencies are probably much more good than bad.
Otherwise, they wouldn’t be there, working pretty well for man, given his conditionand his limited brain capacity. So the tendencies can’t be simply washed out automatically, and shouldn’t be. Nevertheless, the psychological thought system described,
when properly understood and used, enables the spread of wisdom and good conduct
and facilitates the avoidance of disaster. Tendency is not always destiny, and knowing
the tendencies and their antidotes can often help prevent trouble that would otherwise occur.
Here is a short list of examples reminding us of the great utility of elementary
psychological knowledge:
1
2
3
4
5

6
7

8

Carl Braun’s communication practices.
The use of simulators in pilot training.
The system of Alcoholics Anonymous.
Clinical training methods in medical schools.
The rules of the US Constitutional Convention: totally secret meetings, no recorded vote by name until the final vote, votes reversible atany time before the end of the convention, then just one vote on thewhole Constitution. These are very clever, psychology-­
respecting
rules. If the founders had used a different procedure, many people
would have been pushed by various psychological tendencies into
inconsistent, hardened positions. The elite founders got our Constitution through by a whisker only because they were psychologicallyacute.
The use of granny’s incentive-­
driven rule to manipulate one­self
toward better performance of one’s duties.
The Harvard Business School’s emphasis on decision trees. When I
was young and foolish, I used to laugh at the Harvard Business
School. I said, “They’re teaching 28-­year-­old people that high school
algebra works in real life?” But later, I wised up and realized that itwas very important that they do that to counter some bad effects
from psychological tendencies. Better late than never.
The use of autopsy equivalents at Johnson & Johnson. At most corporations, if you make an acquisition and it turns out to be a disaster,
all the people, paperwork, and presentations that caused the foolishacquisition are quickly forgotten. Nobody wants to be associatedwith the poor outcome by mentioning it. But at Johnson & Johnson,
the rules make everybody revisit old acquisitions, comparing predictions with outcomes. That is a very smart thing to do.
45

9

10

The great example of Charles Darwin as he avoided confirmationbias, which has morphed into the extreme anti-­confirmation bias
method of the double-­blind studies wisely required in drug researchby the FDA.
The Warren Buffett rule for open-­outcry auctions: Don’t go.

My fourth question is: What special knowledge problems lie buried in thethought system demonstrated by your list?
Well, one answer is paradox. In social psychology, the more people learn about
the system, the less it is true, and this is what gives the system its great value as apreventer of bad outcomes and a driver of good outcomes. This result is paradoxicaland doesn’t remind one of elementary physics, but so what. One can’t get all theparadox out of pure math, so why should psychology be shocked by some paradox?
There is also some paradox in cognition change that works even when the
manipulated person knows he is being manipulated. This creates a sort of paradox ina paradox, but again, so what.
I once much enjoyed an occasion of this sort. I drew this beautiful woman as
my dinner partner many years ago. I’d never seen her before. She was married to aprominent Los Angeles man. She sat down next to me, turned her beautiful face up,
and said, “Charlie, what one word accounts for your remarkable success in life?” I
knew I was being manipulated by a practiced routine, and I just loved it. I never see
this woman without a little lift in my spirits. And, by the way, I told her I was rational. You’ll have to judge yourself whether that’s true. I may be demonstrating some
psychological tendency I hadn’t planned on demonstrating.
My fifth question is: Don’t we need more reconciliation of psychology and economics? My answer is yes, and I suspect that some slight progress is being made. I
have heard of one such example: Colin Camerer of Caltech, who works in experimental economics, devised an interesting experiment in which he caused high-­IQ
students, playing for real money, to pay price A + B for a “security” they knew would
turn into A dollars at the end of the day. This foolish action occurred because thestudents were allowed to trade with each other in a liquid market for the security.
Some students then paid price A + B because they hoped to unload on other students
at a higher price before the day was over.
What I will now confidently predict is that, despite Camerer’s experimental
outcome, most economics and corporate finance professors who still believe in thehard-­form efficient-market hypothesis will retain their original belief. If so, this will
be one more indication of how irrational smart people can be when influenced bypsychological tendencies.
My sixth question is: Don’t moral and prudential problems come with knowledge of these psychological tendencies? The answer is yes. For instance, psychological knowledge improves persuasive power, and, like other powers, it can be used forgood or ill. Captain Cook once played a psychology-­based trick on his seamen tocause them to eat sauerkraut and avoid scurvy. In my opinion, this action was bothethical and wise under the circumstances, despite the deliberate manipulation
involved.
But ordinarily, when you try to use your knowledge of psychological tendencies
in the artful manipulation of someone whose trust you need, you will be making
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both a moral and a prudential error. The moral error is obvious. The prudential error
comes because many intelligent people, targeted for conscious manipulation, arelikely to figure out what you are trying to do and resent your action.
My final question is: Aren’t there factual and reasoning errors in this talk? The
answer is yes, almost surely yes. The final revision was made from memory overabout 50 hours by a man 81 years old, who never took a course in psychology and has
read none of it, except one book on developmental psychology, for nearly 15 years.
Even so, I think the totality of my talk will stand up very well, and I hope all mydescendants and friends will carefully consider what I have said. I even hope that
more psychology professors will join me in 1) making heavy use of inversion, 2) driving for a complete description of the psychological system so that it works better as achecklist, and 3) especially emphasizing effects from combinations of psychologicaltendencies.
Well, that ends my talk. If in considering what I have said you had 10 percent
the fun I had in saying it, you were lucky recipients.

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TALK ELEVEN REVISITED
In this talk, made in 2000, I gave favorable mention to Judith Rich Harris’s strong-­
selling book The Nurture Assumption. You will recall that this work demonstrated
that peer pressure on the young is far more important, and parental nurture muchless important, than had been commonly recognized.
The success of the book, with its vast practical implications, has an interesting
story behind it. Long before the book was published, Harris was kicked out of Harvard’s PhD program in psychology because Harvard believed that she lacked qualities ideal in psychological research. Then later, out of illness and obscurity, as she
was pretty much housebound throughout adult life by unfixable auto­immune disease, she published an academic paper on which her subsequent book was based.
And for that paper she won a prestigious medal, named after the man who signed her
dismissal notice from Harvard, awarded annually by the American Psychological
Association for distinction in published writing.
When I learned from her impressive book that this ironic result had occurred, Iwrote to Harvard, my alma mater, urging it to award Harris, whom I did not know,
an honorary PhD—or, better yet, a real PhD. I cited the example of Oxford. That
great university once allowed its best student, Samuel Johnson, to leave without adegree because he was too poor to continue paying tuition. But Oxford later madegracious amends. It gave Johnson a doctorate after he conquered sickness andbecame famous in a tough climb once described in his own words: “Slow rises worth,by poverty oppressed.”
I failed utterly in my effort to convince Harvard to imitate Oxford in this way.
But Harvard did later recruit from MIT one of the most famous living psychology
professors, Steven Pinker, and Pinker is a big admirer of Harris. From this step, we
can see one reason why its liberal arts division is more highly regarded than mostothers. The division’s extreme depth often allows partial correction of boneheaderrors that would flourish unopposed elsewhere.
In 2006, Harris, struggling further through her unfixable illness, publishedanother book, No Two Alike. The title is apt because one central question the author
assaults is why identical twins turn out to be so different in important aspects ofpersonality. Her dogged curiosity and rigor in dealing with this question remind meof both Darwin and Sherlock Holmes. And her solution is very plausible, as she collects and explains data from professional literature, including an interesting casewherein one of two identical twins became a success in business and family life
while the other twin went to Skid Row.
I won’t here disclose Harris’s desirably generalized answer to her central question, because it would be better for Almanack readers to first guess the answer, thenread her book. If Harris is roughly right, which seems very likely to me, she has
twice, from a very handicapped position, produced academic insights of great practical importance in child-­rearing, education, and much else.
How could this rare and desirable result happen? Well, by Harris’s own account,
she was “impertinent and skeptical, even as a child,” and these qualities, plus patient,
determined skill, have obviously served her truth-­seeking well, all the way throughto age 67. No doubt she was also assisted by her enthusiasm in destroying her own
ideas, as she now demonstrates by apologizing for her former work as a textbook
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writer who repeated wrong notions, now outgrown.
In this talk I displayed some impertinency of my own by delivering an extreme-­sounding message. It claims nothing less than that 1) academic psychology is hugely
important; 2) even so, it is usually ill-­thought-­out and ill-­presented by its PhD denizens; and 3) my way of presenting psychology often has a large superiority in practical utility compared to most textbooks. Naturally, I believe these extreme claims arecorrect. After all, I assembled the material contained in this talk to help me succeed
in practical thinking and not to gain advantage by making public any would-­beclever notions.
If I am even partly right, the world will eventually see more psychology inroughly the form of this talk. If so, I confidently predict that the change in practicewill improve general competency.
And with that, I have nothing more to add.

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