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HomeCognitive BiasesThe 25 Cognitive Biases Explained (Learn These To Improve Your Life!)

The 25 Cognitive Biases Explained (Learn These To Improve Your Life!)

The 25 Cognitive Biases

list-of-cognitive-biases

A cognitive bias is a mistake in reasoning, evaluating, remembering, or other cognitive process, often occurring as a result of holding onto one’s preferences and beliefs regardless of contrary information. Psychologists study cognitive biases as they relate to memory, reasoning, and decision-making.

Cognitive biases cause us to overpay at auctions, to place higher value on things than we should, to trust people that shouldn’t necessarily be trusted and to make decisions which, if looked at through the means of a mental model or framework we would see is irrational.

In short, a cognitive bias is a hard-wired way we think that causes us to misjudge.

If you’ve heard or watched any of Tai Lopez’s videos or speeches over the last few years you’d likely know he’s a big advocate of understanding and the power of the 25 cognitive biases – Tai did not come up with these, he’s merely carrying the message of Charlie Munger.

1. Reward & Punishment Superresponse Tendency Bias

reward-bias

Number 1 Of The 25 Cognitive Biases… 

Under-recognition of the power of what psychologists call ‘reinforcement’ and economists call ‘incentives.’

Examples Of The Reward & Punishment Superresponse Tendency Bias

This is the #1 reason why typically all sales job are commission based – there’s literally no motivation for the salesmen to put in the hard yards to acquire clients and make sales unless they’re getting something extra out of it too – cold hard cash in the form of commission.

Charlie Munger explains that the Federal Express shifted from an hourly rate to a shift based rate as their job was time sensitive.
Needless to say, the quicker they could get the shift done the quicker they could go home and the more money they’d make in a shorter amount of time (provided they worked harder).

How To Avoid Falling Victim To The Reward & Punishment Superresponse Tendency Bias

Understand that if you’re asking or hiring someone to perform a task for you you’re going to likely get a quicker turn-around time and better work if you’re paying a commission or bonus based upon the speed or quality of the work.

At the same time the reward bias can be used on us (or we can strategically use it on ourselves) when it comes to getting things done and reaching goals.
For example, when my business hits X milestone I’m going on a 2 week vacation, or if I stick to my diet for the next 6 days on the 7th day I’m going to treat myself to X meal.

2. Liking/Loving Tendency Bias

love-bias

Number 2 Of The 25 Cognitive Biases… 

The tendency to especially like oneself, one’s own kind and one’s own idea structures, and the tendency to be especially susceptible to being misled by someone liked.
The most common form of liking tendency you’ll see is toward individual people and brands or organizations.

Examples Of The Liking/Loving Tendency Bias

We tend to turn a blind eye to the poor decisions and shady actions performed by individuals and companies we like or love.
For example if Microsoft released a product that didn’t have _____ feature we might patronize them, but if Apple did the same thing many wouldn’t pay any attention to it or may even justify why they don’t need ____ feature.
This is simply brand loyalty displaying the liking tendency bias.

If a personal trainer told us to do ____ exercise even though we knew that it was ineffective or broscience but we liked them we’d dismiss what we’d previously heard and do it anyway (this is also a form of authority bias).

How To Avoid Falling Victim To The Liking/Loving Tendency Bias

Look at the information, the advice, the object or the product you’re receiving irrespective of the brand or person that you’re getting it from.
If the product you were buying was from a generic brand (not your favorite brand) would it still be so great? Would you still see beyond its flaws?

3. Disliking/Hating Tendency Bias

hate-bias

Number 3 Of The 25 Cognitive Biases… 

Disliking distortion, bias from that, the reciprocal of liking distortion and the tendency not to learn appropriately from someone disliked.
True information coming from a disliked source is often ignored.

Examples Of The Disliking/Hating Tendency Bias

We tend to turn a blind eye to the poor decisions and shady actions performed by individuals and companies we like or love.
We would rather listen to a lie from someone we liked than the truth from someone we disliked.

We filter out information from sources we hate or dislike.

For example if the replacement coach of your basketball team told you you’re dribbling the wrong way and gave you actionable advice on how to fix it you’d likely block out that advice and deny your mistake.

How To Avoid Falling Victim To The Disliking/Hating Tendency Bias

Look at the information, the advice, the object or the product you’re receiving irrespective of the brand or person that you’re getting it from.
Forget the source for a moment and take the information before you allow your brain to deny or filter it out due to the disliking tendency.

4. Doubt/Avoidance Tendency Bias

doubt-bias

Number 4 Of The 25 Cognitive Biases… 

Once we’ve got some information on a subject we don’t like to hear new (even correct!) information.
As new information comes in we ignore it and make a snap decision based upon our (consistent) previous knowledge.

Examples Of The Doubt/Avoidance Tendency Bias

If you were a firm believer that counting calories didn’t work and you believed this for a decade even when new information comes out proving that it 100% does, and that previous studies and information were incorrect and ill-informed your brain would attempt to block out this information.

Charlie Munger uses a specific example from a Dean of Physics in his speech “The Psychology of Human Misjudgement”:

“According to Max Planck, the really innovative, important new physics was never really accepted by the old guard. Instead a new guard came along that was less brain-blocked by its previous conclusions”

Do not put your brain in chains too young, be open and adaptable to new information – don’t allow your brain to keep you stubborn and stuck with the information you already know and are bias towards.

How To Avoid Falling Victim To The Doubt/Avoidance Tendency Bias

Take your time and analyze.

When we’re performing research or amidst a decision we’ve already got a X amount of information that has our brain perceiving the situation a certain way in order to form its judgement and ultimately a decision (be it a purchase or investing scenario).
If and when you uncover new information set yourself a cooling off period to analyze this information and take it into account before making any snap decision based upon doubt or stress.

5. Inconsistency-Avoidance Tendency Bias

inconsistency-bias

Number 5 Of The 25 Cognitive Biases… 

As the saying goes To the man with a hammer, every problem looks like a nail.
Removing repetitive traits such as bad habits and daily routines is harder than one would expect.

Examples Of The Inconsistency-Avoidance Tendency Bias

We do not to change our daily habits, be it both good and bad as are brain is programmed to remain the same due to 3 outstanding reasons:

  • It facilitated faster decisions when speed of decision was an important contribution to the survival on nonhuman ancestors that were prey.
  • It facilitate the survival advantage that our ancestors gained by cooperating in groups, which would have been more difficult to do if everyone was always changing responses.
  • 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.

How To Avoid Falling Victim To The Inconsistency-Avoidance Tendency Bias

Habits and changes to our thought pattern or behavior take conscious effort for the first 1 – 2 months until we’re able to ‘re-wire’ our brain to implement the new habit or break the old habit without exerting conscious effort.

Flossing your teeth at 6am every morning after your breakfast may seem like a chore for the first 30 days, and you’ll likely have to add it to your daily to-do list so you remember to make it happen, but after that period your brain will remember and you’ll automatically begin to do it (after 2 months it gets to the point where you won’t be able to leave the house without flossing!).

Use this technique to obliterate negative habits by consciously preventing yourself from doing them while at the same time beginning to implement new positive habits in your life.

6. Curiosity Tendency Bias

curiosity-bias

Number 6 Of The 25 Cognitive Biases… 

The desire to seek more information and become a learning machine.

There is not enough curiosity to learn, even though you receive so many benefits from a continuous learning process. Munger says, “the curious are also provided with much fun and wisdom once formal education has ended.”

Examples Of The Curiosity Tendency Bias

There’s 3 types of people in this world:

  • People that make things happen
  • People that watch things happen
  • People that wonder what happened

Raise your awareness level so you’re not wondering.

Know what all the buttons on your computer do, you’re using it daily so you must know about it. Know about your car, know about all the things you frequently use.

Curiosity is the catalyst for success – Stephen Hawking, Bill Gates… all the visionaries in the world started off with an unmatched level of curiosity.

How To Avoid Falling Victim To The Curiosity Tendency Bias

Follow your curious nature.

A renaissance man or polymath is multi-talented.

Read and learn skills in all areas of life such as:

  • Learn another language
  • Learn to play a musical instrument
  • Read more books on a variety of topics (health, science, maths)

The many benefits of increasing your knowledge and broadening out include:

  • Becoming a more interesting person in conversation
  • Knowing both sides to an argument to truly differentiate pros and cons
  • Iron sharpens iron as a friend sharpens a friend

It’s all about the materials

The more materials in your kitchen the better the meal you produce.
A top tier chef will be outperformed by an amateur if they have a sufficient amount of materials.

Subject matter knowledge is a material, the more unique materials (music, art, science, health) you add the greater a chef (renaissance person) you become.

7. Reciprocation Tendency Bias

reciprocation-bias

Number 7 Of The 25 Cognitive Biases… 

When we receive something, whether genuinely free or from the kind will of another we want to give back.
This can be good in personal situations, however can also make us be a sucker when it comes to business deals.

Examples Of The Reciprocation Tendency Bias

If a friend buys you a drink when you’re out a bar the next round or next time you’re at the bar you’ll feel inclined to reciprocate and buy them a drink.

Marketers and salesmen often attempt to use the reciprocation bias against us – they’ll give us a free ____ or go out of their way to help us with _____ so when it comes time to attempt to close a business deal with us we’re more likely to say yes as a gesture of good-will because we recall that they’ve helped us.

Another example that Charlie Munger explains in his speech to Harvard University is as follows:

When requesting something of someone the success rate is easily increased by asking for more first then backing off and asking for what you truly want.
Aka. the ask-for-a-lot-and-back-off technique.

For example, you may ask a bunch of friends if they’ll drive you to the doctors surgery 50 miles away and a number of them will say yes, and I’m sure a number will say no.
The follow up to those that declined your request is the real request – for example “will you take me to a doctors surgery 20 miles away instead then?” This will likely get more ‘yes!’ responses than if you originally asked them to drive you 20 miles.

How To Avoid Falling Victim To The Reciprocation Tendency Bias

Before making any important decision ask yourself if your current thought process and intuition are organically your own or if they are being influenced by a deed or gesture from the party you’re dealing with.

8. Influence-From-Mere-Association Tendency Bias

influence-bias

Number 8 Of The 25 Cognitive Biases… 

We often associate brands, people and groups with others based on advertising along with what we’re told.

Examples Of The Influence-From-Mere-Association Tendency Bias

Big brands understand the association or pavlovian bias and use this to their advantage ALL of the time.
For example, Coca Cola sponsors athletes, celebrities and likes to get there name out at any major event they can.

Why are Coca Cola spending so much time and money investing in these people and events that aren’t really linked to their product?

So your brain subconsciously associates the Coca Cola brand with these great people and fun times.

The end result? You spend more money on their product as your brain has perceived the experience of having their product as fun and ties in the association of the greats you’ve seen associated with the brand.

How To Avoid Falling Victim To The Influence-From-Mere-Association Tendency Bias

Cut the advertising and the associations you have in your mind and examine the object, person or product themselves for what it is.

If you’re in your local supplement store and you’re buying protein ask yourself if you’re buying that particular protein because of the studies performed on it, the value for money and the macronutrient profile contained within the protein supplement, or if you’re buying it just because of the fitness models and celebrities associated with that particular product or brand.

If your answer is the later…. well it’s time to reevaluate your options.

9. Pain-Avoiding Psychological Denial Bias

pain-avoidance-bias

Number 9 Of The 25 Cognitive Biases… 

he pain of admitting and accepting certain truths is too much to handle so we continue to deny it and deny it.

Examples Of The Pain-Avoiding Psychological Denial Bias

The death of a loved one or the criminal activity of someone you know) is too much to handle so we continue to deny it and deny it.
We distort our judgement for years until we’re able to bear it.

Take for example the people that were lost on Malaysian Airlines flight MH370 – searches continued for months upon months with the thought that they’re still all alive and intact somewhere.
We know well and good that a human can only survive X amount of time without food and water, let alone if left in the ocean or other unfavourable terrain.

How To Avoid Falling Victim To The Pain-Avoiding Psychological Denial Bias

Look at things for what they are, don’t allow your mind to fool you to avoid the pain of the moment – as eventually you will have to.

As the old saying goes… “It is what it is” 

Understand like the stoics that there are situations that are beyond your control, what is within your control however is how you respond to said situations.

10. Excessive Self-Regard Tendency Bias

excessive-self-regard-bias

Number 10 Of The 25 Cognitive Biases… 

We think we’re more skilled, more talented and all-round better than the average man out there.

Examples Of The Excessive Self-Regard Tendency Bias

Michael Jordan was extremely cocky and confident but his coaches continue to say he was the most teachable person they’d ever seen (he listened to the 1% and ignored the 99%).

You must tune out the noise that is the 99% if you want to become successful.
Learn from the 1% – the subject matter experts. Knowledge from them will build your confidence.

Don’t fall victim to American Idol syndrome and become delusional, thinking you’re good at the wrong thing.
You can’t fool people (there’s no A list actor or singer that isn’t extremely good!)

You must do things that no one else is doing while maintaining faith that it’ll pay off in the long run (end game optimism).

Do the work then reward yourself and enjoy your accomplishments – “Pat yourself on the back on Friday, not Monday”

How To Avoid Falling Victim To The Excessive Self-Regard Tendency Bias

Don’t think you’re the best, it takes in excess of 10,000 hours (also known as the ’10 dark years’) to edge your way to mastery.
Be constantly willing to learn from those that’ve walked the path that you’re on (don’t listen to everyone, ensure you’re listening to the right people).

There’s a line between confidence and arrogance, don’t cross it as this is known as tall poppy syndrome (people don’t like this and will cut you down).

11. Over-Optimism Tendency Bias

stress-bias

Number 11 Of The 25 Cognitive Biases… 

We tend to be too optimistic (at least in the day to day) which leads to disappointment when things don’t go our way (because we expect them to).

Examples Of The Over-Optimism Tendency Bias

Life will deal tremendous blows to you in the form of death of loved ones, loss of finances and entropy over time.

We think we’re going to live forever, we think we’re going to achieve all that we set out to do (often without taking action!)

As Seneca the stoic says in ‘On The Shortness of Life’ many of us are merely passing time, we’re optimistic that we’re going to get what we want without lifting a finger to get it!

How To Avoid Falling Victim To The Over-Optimism Tendency Bias

You must have long term (end game) optimism as faith is a necessity for success.

You must have force of will and faith (feel success before you grasp it).

Preparation and expectation are key to overcoming the adversity that we all will encounter in life – when you’re expecting things they are not as dramatic.

Fear is functional – while you remain optimistic in the long term you must be pessimistic in the day to day operations.

All emotions have functional uses – fear, anxiety, confidence… harness these for good.

Contemplate the downside like the F-22 fighter pilots… what could go wrong? Develop multiple plans based on these.

12. Deprival-Superreaction Tendency Bias

deprivation-bias

Number 12 Of The 25 Cognitive Biases… 

We react irrationally when there’s a chance we’ll love something we had or almost had… regardless of how small or petty it is.

Examples Of The Deprival-Superreaction Tendency Bias

The #1 example of this is attempting to take a toy out of a dogs mouth once it has been carrying it around, the dog will take you to war before it gives up its toy!
The toys it has not yet played with or placed in its mouth it could not care less about.

Another example of this I’ve seen time and time again is when you’ve got a perfect view at an event or concert and a car, person or object of any kind ever so slightly obstructs your view…
The arguments and disdain this can cause are highly irrational.

The pain in losing $100 is double that of the good feeling acquired from winning $100.

How To Avoid Falling Victim To The Deprival-Superreaction Tendency Bias

Understand that the only thing we’re not able to acquire more of is time, if you’ve lost money or skill this can be re-acquired.
Go out of your way to enjoy your winnings and appreciate them when you do have them instead of moaning on the losses you’ve experienced.

13. Social Proof Tendency Bias

social-proof-bias

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.

14. Contrast-Misreaction Tendency Bias

contrast-bias

Number 14 Of The 25 Cognitive Biases… 

We’re constantly over-influenced by contrast as we don’t have a baseline.

Examples Of The Contrast-Misreaction Tendency Bias

put one hand in a bucket of hot water and the other hand in a bucket of cold water for a minute.
Immediately remove both hands and place them in a bucket of room temperature water and one hand will still feel hot while the other feels cold – the water is the same temperature however we’re basing the feelings on the contrast of our previous experience (bucket).

We do not have an absolute scale, we only have a contrast scale.

“If you throw a frog into very hot water, the frog will jump out, but if you put the frog in room temperature water and just slowly heat the water up, the frog will die there.”

This ties into contrast, as small change bit by bit can go un-noticed to those (most of us!) that’re not very observant.

When it comes to shopping and sales the over and under inflation of prices is used to influence our decision making (surprise, surprise!)

Our price today is only $49,95, don’t pay $129.95 elsewhere!” <— this is a prime example and I’m sure you’ve seen an advertisement like this online or in the newspaper.

How To Avoid Falling Victim To The Contrast-Misreaction Tendency Bias

Do not compare, instead examine things individually on a case by case basis.
Although this isn’t as efficient you’ll be focused on the one thing or product and will not be able to subconsciously contrast in order to make your decision the way the salesmen wants you to.

15. Stress-Influence Tendency Bias

stress-bias

Number 15 Of The 25 Cognitive Biases… 

We allow the onset of stress to make fast, extreme decisions which can often be a mixed bag of good and bad.

Examples Of The Stress-Influence Tendency Bias

Adrenaline tends to produce faster and more extreme reactions. Some stress can improve performance but heavy stress often leads to dysfunction.

How To Avoid Falling Victim To The Stress-Influence Tendency Bias

If possible avoid making decisions when you’re stressed.

Set yourself a cooling off period or put aside a block of time to take inventory on the situation when you’re not stressed.
Examine your options after going for a run, getting a massage or performing some guided meditation – then you’ll be in the right frame of mind.

16. Availability-Misweighing Tendency Bias

availability-bias

Number 16 Of The 25 Cognitive Biases… 

tendency to overweigh conveniently available information and other psychologically misrouted thinking tendencies.

Examples Of The Availability-Misweighing Tendency Bias

Bias from the non-mathematical nature of the human brain in its natural state as it deal with probabilities employing crude heuristics, and is often misled by mere contrast, a tendency to overweigh conveniently available information and other psychologically misrouted thinking tendencies.

In a sense these psychological tendencies make things unavailable, because if you quickly jump to one thing, and then because you jumped to it the consistency and commitment tendency makes you lock in, boom, that’s error number one.

Or if something is very vivid, that will really pound in. And the reason that the thing that really matters is now unavailable and what’s extra-vivid wins is, I mean, the extravividness creates the unavailability.

How To Avoid Falling Victim To The Availability-Misweighing Tendency Bias

Simply remember “An idea or a fact is not worth more merely because it is easily available to you

17. Authority-Misinfluence Tendency Bias

authority-bias

Number 17 Of The 25 Cognitive Biases… 

When it comes to authority figures we tend to trust their actions irrespective of our own knowledge.

Examples Of The Authority-Misinfluence Tendency Bias

Living in dominance hierarchies as he does, man was born mostly to follow leaders, with only a few people doing the leading. And so, human society is formaly organized into dominance hierarchies.

In his speech Munger explains “they don’t do this in airplanes, but they’ve done it in simulators. They have the pilot do something where the co-pilot, who’s been trained in simulators a long time — he knows he’s not to allow the plane to crash — they have the pilot to do something where an idiot co-pilot would know the plane was going to crash, but the pilot’s doing it, and the co-pilot is sitting there, and the pilot is the authority figure. 25% of the time the plane crashes.”

How To Avoid Falling Victim To The Authority-Misinfluence Tendency Bias

Look at the information and the facts, not the mouth they’re coming from.

When asked to do something ask yourself ‘why?’ to ensure it makes sense before proceeding –  don’t be the co-pilot that allows the plane to crash.

18. Use-It-Or-Lose-It Bias

use-it-or-lose-it-bias

Number 18 Of The 25 Cognitive Biases… 

Skills attenuate with disuse.

Examples Of The Use-It-Or-Lose-It Bias

“You don’t get better at something by not doing it”

Building and maintaining muscle mass requires the application of tension on the muscle, without tension our muscles don’t have the demand to grow.
Needless to say, weeks and months out of the gym will begin to see your muscle mass disappear – muscle wastage occurs because you’re not lifting heavy or eating correctly to maintain the muscle – a great example of the use it or lose it bias.

How To Avoid Falling Victim To The Use-It-Or-Lose-It Bias

Life long learning in the form of reading books, attempting new skills and being curious in general will slow down this entropy (decay over time).

Daily exercise comprising of weights, cardio and mobility will ensure your body remains in top tip shape.

19. Sene­sce­nce­-Mi­sin­flu­ence Bias

senescence-bias

Number 19 Of The 25 Cognitive Biases… 

As we age there is a natural loss of certain skills and abilities.

Examples Of The Sene­sce­nce­-Mi­sin­flu­ence Bias

Sadness comes in the form of regression. (this is due to the contrast bias)

Build good will in other people – help them, give them gifts etc. as this is known as ‘building forgiveness’.

Build forgiveness with your body by going to the gym.

Build forgiveness with your bank account by saving and investing instead of squandering your income.

Build forgiveness with your joints by stretching and performing yoga on a regular basis.

Do what’s hard when it’s easy

How To Avoid Falling Victim To The Sene­sce­nce­-Mi­sin­flu­ence Bias

Life long learning in the form of reading books, attempting new skills and being curious in general will slow down this entropy (decay over time)

20. Twaddle Tendency Bias

twaddle-bias

Number 20 Of The 25 Cognitive Biases… 

The twaddle tendency is essentially the performance of time wasting activities as a result of confusion.

Examples Of The Twaddle Tendency Bias

Munger gives the example of a honey bee, once it finds nectar it communicates to the other bees the location of the nectar – when it can’t find nectar instead of retreating to the hive it returns to perform an incoherent dance to the other bees as it has no means of communicating what it has (or rather hasn’t found).

How To Avoid Falling Victim To The Twaddle Tendency Bias

Don’t spend your time on nonsense.
Have an end-goal in mind and take the necessary actions required to achieve the goal, however don’t be so rigid in your plan to get there… “there is more than one way to the top of the mountain

Don’t twaddle with the actions you’re taking,. if they’re not working then change it up and find what does work.

21. Drug­-Mi­sin­flu­ence Bias

drug-misinfluence-bias

Number 21 Of The 25 Cognitive Biases… 

The tendency to distort reality so it’s bearable.

Examples Of The Drug­-Mi­sin­flu­ence Bias

If you’re spending every evening or weekend when you’re not at work drinking alcohol or taking recreational drugs it’s time to take a step back and change the path you’re on.

How To Avoid Falling Victim To The Drug­-Mi­sin­flu­ence Bias

Examine your career, your relationships and create a life of choice that you do not need to escape from.

22. Reason-Respecting Tendency Bias

reason-respecting-bias

Number 22 Of The 25 Cognitive Biases… 

Mental confusion caused by information not arrayed in the mind

Examples Of The Reason-Respecting Tendency Bias

Some people just want the answers, not the reasons or a better understanding.

Or, in more technical terms the reason-respecting tendency is mental confusion caused by information not arrayed in the mind and theory structures, creating sound generalizations developed in response to the question “Why?” Also, mis-influence from information that apparently but not really answers the question “Why?” Also, failure to obtain deserved influence caused by not properly explaining why.

You’ve got to array facts on the theory structures answering the question “Why?” If you don’t do that, you just cannot handle the world.

How To Avoid Falling Victim To The Reason-Respecting Tendency Bias

You want to persuade somebody, you really tell them why.

Remember, incentives matter. Vivid evidence matters and WHY really, really matters. Answer it correctly.

23. Lollapalooza Tendency Bias

lollapalooza-bias

Number 23 Of The 25 Cognitive Biases… 

The lollapaloozza tendency is the result of multiple cognitive biases combining together to form an almost irresistible offer or scenario.

Examples Of The Lollapalooza Tendency Bias

Examples of lollapalooza situations include:

  • Auctions
  • Sales
  • Tupperware parties

An auction is the perfect example of the lolapolooza effect, as it incorporates the following biases:

Scarcity bias (there’s only one item and a limited amount of time to bid/buy it)
Social proof bias (there’s other people there interested in purchasing and bidding on the same items as you)
Authority bias (the auctioneer is physically positioned higher than you and is seen as an authority)
Reward bias (the ‘feel good’ moment and dopamine release upon ‘winning’ regardless of whether this comes as a result of paying above market value)

How To Avoid Falling Victim To The Lollapalooza Tendency Bias

Avoid these situations, they’re too powerful to overcome.

24. Kantian Fairness Tendency

katian-fairness-bias

Number 24 Of The 25 Cognitive Biases… 

We know life isn’t fair but we can’t come to terms with this truth.
A small amount of unfairness can make an entire ecosystem function more efficiently.

Examples Of The Kantian Fairness Tendency Bias

Life isn’t fair, but many can’t accept this. Tolerating a little unfairness should be okay if it means a greater fairness for all. The example Munger uses is letting in other drivers on the freeway knowing they will reciprocate in the future.

How To Avoid Falling Victim To The Kantian Fairness Tendency Bias

Tolerate a small amount of unfairness from time to time with the hope you’ll be repaid in the near future.
This may mean letting a driver merge infront of you or perhaps carrying more physical load for a short amount of time to benefit your group.

25. Envy/Jealousy Tendency

envy-jealousy-tendency

Number 25 Of The 25 Cognitive Biases… 

The almost instant feeling of jealousy when we see something we desire in another individuals’ possession

Examples Of The Envy/Jealousy Tendency Bias

This bias has been hard-wired into our brain from thousands upon thousands of years, in ancient times food was often-scarce, food seen in possesion of another member of the same species triggers envy and jealousy.

Today we’re jealous of superficial things – men with better bodies than our own, colleagues who earn more money or drive a slightly newer car than us.

How To Avoid Falling Victim To The Envy/Jealousy Tendency Bias

Do not spend your days wishing for the winning lottery ticket, or ‘needing’ anything.
As Charlie Munger, the Berkshire Hathaway billionaire investor said “to get what you want you have to deserve what you want”.

Spend your time in the present, building.

Do not spend your time in the future, wishing.

The world responds to seed, not need.

Put in the work today, focus on today.

Your energy is best spent planting your seeds today so come the future you will reap the rewards from your days’ work.

As Warren Buffet said “it is not greed that drives the world, but envy”

Want To Know More About Charlie Munger’s Cognitive Biases & How To Dominate Life? 

Charlie's almanack

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!)

Check it out and grab your copy of Poor Charlie’s Almanack here.

What’s Your Take On The 25 Cognitive Biases? Let Me Know In The Comments Below!

Scott J.
Scott J.https://ignorelimits.com
I’m SJ. I’m a fitness enthusiast and published author. I transformed my body from a skinny fat 135lbs with 18% body fat to a solid 192lbs at 8% body fat. I became qualified in a field I was passionate about. I founded several online businesses that allow me to pursue ideas and projects in my life that I am passionate about without having to constantly worry about money. I published several eBooks explaining the training and dieting techniques I used to achieve the body I have today. I learnt a plethora of new information on dieting and fitness by reading and applying what I read, to find out what does work and what doesn’t work, because as I’m sure you’ve noticed the health and fitness industry is full of non-sense claims and BS. I found out what was true and what worked for me and applied that knowledge. And you bet I had fun during the whole process.

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