Our lives are primarily shaped by the decisions we make.
We make millions of decisions throughout the course of our lives.
Some needless to say are less important than others.
What to wear on any given day is a decision. What to eat is another.
And making these types decisions takes time.
The more of these less important decisions we streamline the better.
It saves time.
As a side note, there’s a reason why Steve Jobs wore the same outfits almost everyday and on every occasion.
And here’s the thing with making decision.
Since our time is limited we need “shortcuts” to make some of these decisions. We simply do not have the time to take into account every little detail and take the “perfect” course of action.
So our brain develops all kinds of “shortcuts” or cognitive biases in order to help us make a decision.
These cognitive biases take place at the subconscious level so most people are not really aware of them so they can be very misleading.
In 1995, Charlie Munger, the famous investment partner of Warren Buffett made a speech at Harvard about the psychology of human misjudgement. The speech can be found at this link. In this speech he identified 25 cognitive biases. They are as follows:
- Reward/Punishment Super-Response Tendency Bias
- Liking/Loving Bias
- Disliking/Hating Bias
- 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
- Over-Optimism Tendency
- Deprival Super-Reaction 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
- Lollapalooze Tendency