7. Bias from over-influence by social proof. “Big-shot businessmen get into these waves of social proof. Do you remember some years ago when one oil company bought a fertilizer company, and every other major oil company practically ran out and bought a fertilizer company? And there was no more damned reason for all these oil companies to buy fertilizer companies, but they didn’t know exactly what to do, and if Exxon was doing it, it was good enough for Mobil, and vice versa. I think they’re all gone now, but it was a total disaster.”
8. Bias from contrast-caused distortions of sensation, perception, and cognition. “In my generation, when women lived at home until they got married, I saw some perfectly terrible marriages made by highly desirable women because they lived in terrible homes. And I’ve seen some terrible second marriages which were made because they were slight improvements over an even worse first marriage. You think you’re immune from these things, and you laugh, and I want to tell you, you aren’t.”
9. Bias from over-influence by authority. “They don’t do this in airplanes, but they’ve done it in simulators. 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. Twenty-five percent of the time, the plane crashes. I mean this is a very powerful psychological tendency.”
10. Bias from deprival super-reaction syndrome. “Take the Munger dog, a lovely, harmless dog. The only way to get that dog to bite you is to try and take something out of its mouth after it was already there. If you’ve tried to do takeaways in labor negotiations, you’ll know that the human version of that dog is there in all of us. I have a neighbor, and his next-door neighbor put a little pine tree on it that was about three feet high, and it turned his 180 degree view of the harbor into 179 and three-quarters. Well they had a blood feud like the Hatfields and McCoys. People are really crazy about minor decrements down.”
11. Bias from envy and jealousy. “I’ve heard Warren [Buffett] say a half a dozen times, ‘It’s not greed that drives the world, but envy.’ And you go through the psychology survey courses, and you go to the index: envy, jealousy, in a 1,000-page book — it’s blank! There’s some blind spots in academia, but it’s an enormously powerful thing.”
12. Bias from chemical dependency. “We don’t have to talk about that. We’ve all seen so much of it. But it’s interesting how it’ll always cause this moral breakdown if there’s any need, and it always involves massive denial.”
13. Bias from misgambling compulsion. “You have a lottery where you get your number by lot, and then somebody draws a number by lot, it gets lousy play. You have a lottery where people get to pick their number, you get big play. People think if they have committed to it, it has to be good. The minute they’ve picked it themselves it gets an extra validity. After all, they thought it and they acted on it.”
14. Bias from liking distortion. “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.”
