Number 13 Of The 25 Cognitive Biases… We look at what everyone else is doing in order to determine what we’ll do.
Examples Of The Social Proof Tendency Bias
Say there’s a shooter running around madly, if everyone else was sitting on the floor calmly you would do the same – social proof is telling you that’s the right thing to do.
On the other hand if everyone was running around in a flurry screaming you’d be doing the exact same thing! You wouldn’t even think of sitting still on the floor.
I used the shooter example as Charlie Munger states that this is over-influence from social proof is at its strongest under conditions of stress.
This social proof tendency is apparent in business too, if one business starts doing certain processes differently or starts adding assorted products to their lineup often you’ll find their competition doing the exact same thing without knowing why! It sets off a chain reaction as it seems to be ‘the right thing to do’ every though it may very well not be.
How To Avoid Falling Victim To The Social Proof Tendency Bias
Think for yourself, when it comes to business and fitness specifically most people are just following what they’ve seen or heard without any specific knowledge or reason as to why they’re doing it.
Do your own research and decide upon what is best for you instead of blindly chasing the masses.
Want To Know More About Charlie Munger’s Cognitive Biases & How To Dominate Life?
I recently purchased Charlie Munger’s flagship book, Poor Charlie’s Almanack – a book filled with hundreds of pages of wisdom from a billionaire and master of mindset and mental frameworks to improve your life..
This book cost me $65 USD. To most this will seem absurd…
“$65 for a book?! What a waste of money”
…these are the same people that spend hundreds of dollars on junk food and alcoholic beverages on Friday and Saturday night.
Delay The Instant Gratification
Don’t adopt the epicurean mentality of “eat, drink and be merry for tomorrow we die.”
You must think long term, you must delay the instant gratification we’re so used to experiencing in this life and invest for tomorrow (stoicism).
“Don’t invest in things that’ll rust, rot or depreciate, invest in things that’ll be worth more later or make you be worth more later”.
The information in this book is worth well over $65 if read and implemented, the information on investing and cognitive biases is worth its weight in gold.
But remember, It’s the application of knowledge that counts, not just the acquisition (read it and take action!)